TEA EXCHANGE BHARATH LTD.

PROJECT
ON
SPECIAL ECONOMIC ZONE

VIPIN RATHIA
Project assigned: 16th may 2009
(MANAGEMENT TRAINEE)
 PROJECT INDEX

1 Introduction & information of SEZ

2 Current status of upcoming SEZ

3 Investment in SEZ & Geography

4 Advantages and Disadvantages of SEZ

5 Objectives behind Setting up of SEZ

6 Private Participation

7 Special Economic Zones SEZ Establishment Procedure.

8 Types of SEZ

9 Minimum Land Requirement

10 Minimum Investment Requirements

Major SEZ benefit & result of benefit
 SEZ {SPECIAL ECONOMIC ZONE}

Sez means special economic zones. It is useful in building up large

industries and providing more employment opportunities to the people who
are below poverty line. The merits of sez are pollution control, cost of land,
manufacturing becomes very easier for the products which are nedded at
short notice. It will help to increase in our economic development and it
will improve the people standard of living that is below poverty line.
 Contents

1 China
2 India
2.1 List of SEZs in India
3 Indonesia
4 Iran
5 Kazakhstan
6 North Korea
7 Pakistan
7.1 List of SEZs in the Pakistan
8 Philippines
8.1 List of SEZs in the Philippines
9 Poland
10 Russia
10.1 Technical/Innovational Zones
10.2 Industrial/developmental Zones
10.3 Tourist Zones
11 Ukraine
12 References
13 External links
List of SEZs in India
• Sricity (Sri City) (SEZ), (Andhra Pradesh) (http://www.sricity.in)
• Velankani SEZ, (Chennai) (http://www.velankanisez.com)
• Pharma and Biotech
SEZ, Aurangabad, Maharashtra (http://www.inspirainfra.com)
• Visakhapatnam (Andhra Pradesh)
• Hyderabad (Andhra Pradesh)
• Polepally (Andhra Pradesh)
• Ahmadabad, Baroda, Kandla and Surat (Gujarat)
• Cochin (Kerala)
• Pithampur (Madhya Pradesh)
• Nagpur also refer MIHAN, Pune and SEEPZ in Mumbai (Maharashtra)
• Chennai, Ilandaikulam Madurai, Nanguneri and Tirunelveli (Tamil
Nadu)
• NOIDA, Greater NOIDA (Uttar Pradesh) UP
• Falta (West Bengal)
• Bangalore [Karnataka]
• Kensington [Powai, Mumbai]
• Mangalore (Karnataka)
Current status of upcoming SEZs-
- Till date the government has notified 63 SEZs. The Ministry of
Commerce might restrict the total number of SEZs approval at 100

State wise distribution of outstanding SEZ projects

State No. of SEZs Details Investment (Rs bn)
available for

no. of
projects
Maharashtra 70 24 610.9
Karnataka 63 28 263.4
Andhra 62 22 379.1
Pradesh
Haryana 50 14 1,257.6
Gujarat 40 29 850.2
Tamil Nadu 23 12 86.5
Uttar 30 5 66.2
Pradesh
West Bengal 21 8 153.4
Orissa 13 8 605.4
Rajasthan 11 1 0.3
Investment in SEZ
Investment in notified Rs. 73348 crore (all Incremental Employment
SEZs (as of 30.6.08) generated after February 2006))
Investment in Rs. 3701.91 crore (incremental investment
Private/State Govt. SEZs generated since Feb. 2006 is Rs. 1946 crore)
which came into force
prior to SEZ Act, 2005
(as of 30.6.08)
Investment in 7 SEZs Rs. 4043.28 crore (incremental investment
established by the generated since Feb. 2006 is Rs. 1764.08
Central Government (as crore)
of 30.6.08.)
GEOGRAPHY :
.The total number of SEZ to come up in the near future in India is about
234
.total investment of Rs.3, 00,000 crore will be invested till December, 2009
.out of which 63 SEZ’s has been notified till date for an investment plan of
Rs.53, 561 crore till December, 2009.
.Out of all these 63 notified SEZs there will be an employment of about
15,75,450 persons or more and if all the 234 SEZs were allowed to be
cleared it may employ about 40,00,000 people in India by the end of
December 2009.
.the proposed SEZs may require maximum of about 1750 square Km.
Advantages and Disadvantages of SEZ.
Advantages
• 15 year corporate tax holiday on export profit – 100% for initial 5 years,
50% for the next 5 years and up to 50% for the balance 5 years equivalent
to profits ploughed back for investment.
• Allowed to carry forward losses.
• No licence required for import made under SEZ units.
• Duty free import or domestic procurement of goods for setting up of the
SEZ units.• Goods imported/procured locally are duty free and could be
utilized over the approval period of 5 years.• Exemption from customs
duty on import of capital goods, raw materials, consumables, spares, etc.•
Exemption from Central Excise duty on the procurement of capital goods,
raw materials, and consumable spares, etc. from the domestic market.

Disadvantages
•Revenue losses because of the various tax exemptions and incentives.
•Many traders are interested in SEZ, so that they can acquire at cheap rates
and create a land bank for themselves.
Objectives behind Setting up of SEZ
1)Generation of additional economic activity
2) Promotion of exports of goods and services
3) Promotion of investment from domestic and foreign sources
4) Creation of employment opportunities
5) Development of infrastructure facilities;
Private Participation:
.Mahindra World City in its new avatar house have declared three SEZs,
which are in the field of Auto, apparel and IT within the township.
.Reliance Industries, ONGC, Mahindra & Mahindra, Reliance Energy,
Wipro, Biocon, Hewlett Packard, Nokia and the Adani group are prominent
among the 40 players who have announced SEZs of their own.
.DLF is investing over Rs 31,000 crore in four units in Amritsar, Ambala,
Ludhiana and Gurgaon
.DS group has a Rs 12,000-crore plan for two SEZs in Haryana and
Himachal Pradesh.
.Bharat Forge, Videocon, Suzlon, etc., are investing over Rs 1,000 crore
each in SEZs in places such as Pune and Mangalore.
Special Economic Zones SEZ Establishment
Procedure.
*Step by Step Procedure
*Documents Submission
*State Government Approval

Step by Step Procedure

1.According to SEZ Act 2005, a Special Economic Zone can be
established either jointly or severally by the Central Government, State
Government, or any other person involve in the manufacturing of goods.
Even a foreign company can also set up SEZ in India.
2.After identifying the proper area a person wishing to establish a SEZ
unit may make a proposal to the State Government.
3.Nowwithstanding anything contained in sub-section (2), any person,
who intends to set up a Special Economic Zone, may, after identifying the
area, at his option, make a proposal directly to the Board for the purpose of
setting up the Special Economic Zone.
4.In case, a State Government intends to set up a Special Economic
Zone, it may after choosing the area, forward the proposal directly to the
Board of Approval for the purpose of setting up the Special Economic
Zone:
5.Every proposal under sub-sections (2) to (4) shall be made in such
form and manner containing such particulars as may be prescribed.
6.The State Government may, on receipt of the proposal made under sub-
section (2), forward the same together with its recommendations to the
Board within a fix period as may be prescribed.
7.Without prejudice to the provisions contained in subsection (8), the
Board may, after receipt of the proposal under sub-section (2) to (4),
approve the proposal subject to such terms and conditions as it may deem
fit to impose, or modify or reject the proposal.

8.The Central Government may prescribe the following requirement for

establishment of a Special Economic Zone, namely:-

.The minimum area of land and other terms and conditions subject to
which the Board shall approve, modify or reject any proposal received by it
under sub-section (2) to (4) ; and.The terms and conditions, subject to
which the Developer shall undertake the authorised operations and his
obligations and entitlements.
9. If the Board,-
* Approves without any modification, the proposal received under sub-
section (2) to (4), it shall communicate the same to the Central
Government; *Approves with modifications the proposal received under
sub-section (2) to (4), it shall, communicate such modifications to the
person or the State Government concerned and if such modifications have
been accepted by such person or the State Government, the Board shall
communicate the approval to the Central Government;
10.The Central Government shall, on receipt of communication under
clause (a) or clause (b) of sub-section (9), grant, within such time as may be
prescribed, a letter of approval on such terms and conditions and
obligations and entitlements as may be approved by the Board, to the
Developer, being the person or the State Government concerned:
11.Any person who, or a State Government which, intends to provide any
infrastructure facilities in the identified area referred to in sub-section (2) to
(4), or undertake any authorised operation may, after entering into an
agreement with the Developer referred to in sub-section (10), make a
proposal for the same to the Board for its approval and the provisions of
sub-section (5) and sub-sections (7) to (10) shall, as far as may be, apply to
the said proposal made by such person or State Government.
12.Every person or a State Government referred to in subsection (11),
whose proposal has been approved by the Board and who, or which, has
been granted letter of approval by the Central Government, shall be
considered as a Co-Developer of the Special Economic Zone.

13.Subject to the provisions of this section and the letter of approval

granted to a Developer, the Developer may allocate space or built up area
or provide infrastructure services to the approved units in accordance with
the agreement entered into by him with the entrepreneurs of such Units.

Subject to the provisions of this section and the letter of approval granted to
a Developer, the Developer may allocate space or built up area or provide
infrastructure services to the approved units in accordance with the
agreement entered into by him with the entrepreneurs of such Units.
Documents Submission

1.15 copies of the application shall be submitted to the Chief Secretary of

the State, which shall indicate:
2. Name and address of the applicant
3.Status of the promoter (whether private/public or joint sector/ NRIs or
state government)
4.Project report

The documents for establishment of SEZ shall be submitted with the

following details: -
.Location of the proposed Zone with details of existing infrastructure and
that proposed to be established,
.Area of the proposed SEZ and its distance from the nearest Sea
Port/Airport/Rail/Road head etc.
.Financial details and mode of financing the project and viability of the
project.
.Details of foreign equity, if any
.Whether the zone will allow only certain specific industries or will be a
multi-product zone.
State Government Approvals

The State Government shall, forward it along with their commitment to the
following to the Department of Commerce, Government of India:
• .hat the area proposed under Special Economic Zone shall be free
from any environmental restrictions;
.Water, electricity and other services would be provided as required;
• .Full exemption shall be given in electricity duty and tax on sale of
electricity for self generated and purchased power;
• .Exemption from State Sales Tax, octroi, mandi tax, turnover tax and
taxes, duty, Cess, levies on supply of goods from Domestic Tariff
Area to SEZ units;
• .That single point clearances system and minimum inspections
requirement under State Laws/Rules would be provided.
• .Generation, transmission and distribution of power shall be allowed
within the SEZ;
• .The Zone will be declared as a Public Utility Service under the
Industrial Disputes Act;
• .All powers under Industrial Dispute Act, 1947 shall be delegated to
Development Commissioner.
Types of SEZ

Sector Specific SEZ-units may be set up for

– manufacture of one or more goods in a sector
– rendering of one or more services in a sector

Multi-product SEZ-units may be set up for

– manufacture of two or more goods in a sector or goods falling in two or
more sectors
– trading and warehousing
– rendering of two or more services in a sector or services falling in two or
more
sectors

Other SEZ’s
– SEZ in a port or airport
– SEZ for Free Trade and Warehousing
 Minimum Land Requirement
Sr Nature of SEZ Minimum Contiguous Minimum Processing
No Area Required Area Required
(Max 5000 ha)

1 Multi Product 1000 ha 50%

2 Sector Specific 100 ha 50%

3 SEZ in Port or Airport 100 ha 50%

4 SEZ for Free Trade Zone 40 ha 50% , 1 lakh sq. m of

and Warehousing built up area,(not
exceed 20% of the
Processing areain
Sector Specific SEZ)

5 Gems and Jewellery, Bio- 10 ha 50%

technology, Non-
conventional Energy

6 Electronic Hardware and 10 ha 50%

Software, Information
Technology

Note
1 hectare = 2.421 acres = 10,000 sq.metres; 1000 hectares = 2500 acres
Minimum Investment Requirements

Sector Specific SEZ’s

– Investment should be more than Rs. 250 crores or
– Net worth* of Rs. 50 crores

Multi product SEZ’s

– Investment should be more than Rs. 1000 crores or
– Net worth* of Rs. 250 crores
Major SEZ Benefits
Development No Customs Duty No Customs Duty
Stage(Capital No Excise Duty No Excise Duty
Goods,Consumables,Co No Sales Tax No Sales Tax
mponents & Spares) No Service Tax No Service Tax
No Purchase Tax No Purchase Tax
No Stamp duty & No Stamp duty & Registration
Registration Fees No Stamp duty on Mortgages
No Stamp duty on No Electricity duty
Mortgages
No Electricity duty

Operation Stage(Raw As above As above

Materials,Consumables,
Components & Spares)

Profit Stage Exemption from No Income Tax for 10 years (8

Income Tax
Results of Benefits

Reduced Cost of infrastructure

Reduced Cost of Utilities
Reduced Cost of Raw Material
Reduced Cost of Capital
Reduced Cost of Manpower
Operational Ease Enabled
Baskets of Benefits leading to global competitiveness
Maha govt signs MoU to develop SEZs

The Maharashtra government's industrial infrastructure arm MIDC signed a

Memorandum of Understanding (MoU) with four companies for
developing special economic Zones (SEZ), which will attract minimum
investment of Rs 17,000 crore and create employment of more than 50,000.
.Eldeco Infrastructure Properties Ltd will develop the multi product SEZ at
Amravti in the backward region of Vidarbha covering over 1,010 hectares.
The expected cost of developing the SEZ is around Rs 600 crore.
.Parsvnath SEZ Pvt Ltd will develop a pharmaceutical SEZ at Nanded in
Marathwada region covering over 150 hectares and the development cost of
the project is expected to be around Rs 47 crore. This project is expected to
attract investment of 5,000 crore and create job opportunities for around
8,000 persons.
.Ajanta Projects India Ltd will develop textile SEZ at Butibori on the
outskirts of Nagpur by investing Rs 73 crore. This SEZ project will bring
investment of Rs 5,000 crore and create jobs for 8,000 to 10,000 persons.
RAJASTHAN
SL/NO NAME OF LOCATION TYPE AREA
DEVELOPER

1 Mahindra Gesco Jaipur IT/ITES 49 hect

2 M/s. Vatika Jaipur Jaipur-Ajmer IT/ITES 20.23 hect

SEZ Developers Expressway
Ltd.

3 Somani Worsted Khushkera Electronics 20 hect

Limited Industrial Hardware
Area, and
Bhiwadi, Software/
ITES
4 Mansarovar Jodhpur Handicraft 131 hect
Industrial
Development
Corporation

5 GENPACT INDIA Jaipur IT/ITS 10 hect

6 RNB Infrastructures BIKANER Woollen 103.41 hect

Sector
7 Rockman Projects Jaipur Multiproduct 1012 hect
Ltd
8 Omaxe Limited Alwar Multiproduct 6070.4 hect
District
9 Ansal Properties Village Gems & 1012.5 hect
 and Infrastructure Sangtera, Jewellery
Limited

10 Parsvnath
Developers Ltd
11 Adani Exports
Limited
12 Suncity Rajasthan Neemrana,alwar Multiproduct 3000hect
SEZ Developer
Pvt. Ltd.
13 SRM Alwar Multi service 1000hect
Infrastructure
Private Ltd
14 Societyfor Neemrana,alwar Multiproduct 323.89 hect
Innovative
Education and
Development
('EMPI' Vittal
Centre
INNOPOLIS)
15 DLF sLtd. Near Bhiwadi IT/ITS 2024hect

16 Mahindra World Kalwara Village IT/ITS 76.1hect

City (Jaipur) Ltd.
17 Rajasthan State
Industrial
Development
Corporation.
18 Mahindra Worldcity Jaipur, Handicraft 103.11 hect
(Jaipur) Limited
19 Mahindra Worldcity Jaipur, Light 104.35 hect
(Jaipur) Limited Engineering
20 RNB Infrastructure Industrial Textile 103.3 hect
Private Limited Area,
Bikaner
21 P S Jaipur SEZ Bhanpur Kala Multi- 205 hect
Developers Pvt. services
Ltd.
22 Arihant Infratech Udaipur Building 220 hect
(India) Pvt. Ltd. District, Materials
23 M/s. Vatika Jaipur Jaipur IT/ITS 20.23 hect
SEZ Developers
Ltd.
24 Somani Worsted Bhiwadi Electronics / 20 hect
Limited ITES
25 Mansarovar Bhiwadi Electronics / 20 hect
Industrial ITES
Development
Corporation
26 RNB Infrastrucure Bikaner Textile sector 103.41 hect
Pvt. Ltd.
Exports from the functioning SEZs
Physical exports in the year 2007-08 accounted for 84% of the total
turnover of SEZs.

Year Value (Rs. Growth Rate (over

Crore) previous year)
2003-2004 13,854 39%

2004-2005 18,314 32%

2005-2006 22 840 25%

2006-20007 34,615 52%

2007-2008 66,638 92%

RAJASTHAN SEZ policy

• There will be no tax for the developers of special economic zone,

units, and other establishments under SEZ. The tax issues usually
include local taxes, sales tax, purchase tax, sales tax, levies, contract
tax, ocroi, cess, and few more. The export sector are bereaved from
all such taxes while exporting goods and services from the domestic
area to international market

• The Central Government will provide enough grants and equity to the
SEZ projects

• of the One of the officers Rajasthan State Pollution Control Board

will always be available in the development commissioner's office to
keep a check on the environmental issues

• Distribution of electricity and power will be sufficient if not

overflowing to avoid any uncanny hindrance that bear chances of
affecting the developments in the SEZ

• There will be sufficient water supply for every work to be carried out
in the SEZ

• The state government will also provide a specific area for public
utility services in the zone

• The development commissioner will permit registration of any small-

scale industry as well the IT units in the special economic zone
 • SEZs are considered as industrial administrative divisions by the state
government

SEZ (Special Economic Zone)

*there are approximately 3,000 SEZs operating in 120 countries.

*which account for over US$ 600 billion in exports.
*and about 50 million jobs.

Tea export up by 64 pc
*country's tea export rose by 64 percent in June this year.
*The county's total tea export increased to 19.62 million kg in June
*against 11.99 million kg in the year ago period, according to the latest Tea
Board update.
*Export from south India increased by more than two times to 14.76
million kg in June compared to 6.17 million kg in the same month last year.
*The export from north India, however, declined to 4.86 million kg from
5.81 million kg.
MAHINDRAWORLD CITY JAIPUR
Following the success of Mahindra World City, New Chennai, the second
Mahindra World City was established in Jaipur. Inaugurated in December
2006, Mahindra World City, Jaipur is spread over an area of 3,000 acres
(12 km2). Promoted by the Mahindra Group in partnership with Rajasthan
State Industrial Development and Investment Corporation Ltd (RIICO, an
agency of the Government of Rajasthan). Mahindra World City, Jaipur is
being developed as a multi-product Special Economic Zone on the format
of an “Integrated Business City”.

The SEZ includes exclusive zones for IT/ITeS Companies, Light

Engineering companies including Auto and Auto Component
manufacturers, Handicraft Companies, Gems & Jewellery Companies and
Apparel companies. Besides these exclusive zones, there will also be a
Domestic Tariff Area (DTA) catering to the demand of domestic industries.
Mahindra World City, Jaipur will also have a dedicated Logistics and
Warehousing Zone for the manufacturing companies in order to provide
complete end to end solutions.Mahindra World City, Jaipur has the largest
IT/ITeS centric SEZ under development in India. The total area spread over
750 acres (3.0 km2) is under development and has already attracted top
companies such as Deutsche Bank, Infosys, Wipro, Nagarro, Truworth,
Tech Mahindra and QH Talbros among others.

A Technology Park ‘Evolve’ promoted by Mahindra World City, Jaipur has

also come up as part of the IT / ITeS SEZ. Set in a campus of 25 acres
(100,000 m2), the Technology Park will lease built-up space for IT/ITES
companies.
Mahindra World City, Jaipur became operational in August 2008 with
Infosys and Detusche Bank, being the first companies to start their
operations

Entrance to Mahindra World City Jaipur

Infosys Technologies, IT SEZ

Deutsche Bank

Customs Office
SEZ OF TEA EXCHANGE
The tea exchange bharath ltd. Can go for the sez in packaging, blending
And processing.Like Wagh Bakri tea group is looking at installing the
machine in special economic zones (SEZs) of Gujarat by next year. Wagh
Bakri eyes SEZs to install tea-bag making machine.

EX: The Bengal government is drawing up plans to set up a special

economic zone (SEZ) in Siliguri for the tea industry. It has identified 100
acres of land near the Dabgram growth centre in Siliguri for the proposed
SEZ. The total cost of setting up the SEZ will be Rs 50-Rs 75 crore. The
SEZ will house tea processing and blending units. The units in SEZ can
import tea without licence and blend it for re-export. They will enjoy
certain fiscal incentives in the form of tax concessions and exemption from
customs duty on import of capital goods, raw materials, consumables and
spares

Calcutta port
The Calcutta Port, in association with the Tea Board, has applied to the
Union ministry of commerce and industry to set up a tea park in the port
area. The park is expected to be granted SEZ status.The park, which will
comprise a tea processing and packaging unit, will be set up on 14 acres of
land near the port at an estimated cost of Rs 28 crore.
Special Economic Zones SEZ Controversy

Introduction
Land, especially agricultural land is a very sensitive issue in India. There
are millions of people whose livelihood depends on agricultural land.
But the introduction of SEZ in India has resulted in the dispossession of
agricultural land and has affected the livelihood of farmer at large. In
against of this, farmers first protested to safeguard their interests through
litigation and court cases challenging the establishment of SEZs. But
later on, the resistance against SEZ in India became massive when
political parties also joined the farmers.

Jamnagar Incidence
In November 2006, farmers from the Jamnagar District in Gujarat
moved the High Court of Gujarat and later to the Supreme Court in order
to challenge the setting-up of a 10,000-acre (approx. 4,000-ha) SEZ by
Reliance Infrastructure. They claimed that the acquisition of large tracts
of agricultural land in the villages of the district not only violated the
Land Acquisition Act of 1894, but was also in breach of the public
interest. This led the Government to “consider” putting a ceiling on the
maximum land area that can be acquired for multi-product zones and
decide to “go slow” in approving SEZs.

Nandigram Violence
The Nandigram violence is another famous incidence related to SEZ
controversy. Nandigram is a rural area in Purba Medinipur district of the
Indian state of West Bengal. It is located about 70 km south-west of
Kolkata, on the south bank of the Haldi River, opposite the industrial city
ofHaldia.

In 2007 the West Bengal government decided to allow Salim Group to set
up a chemical hub at Nandigram under the SEZ policy. Farmers of that
village were against it. So, on the order of the Left Front government on 14
March, 2007, more than 3,000 heavily armed police stormed the
Nandigram area. The main objective was to remove the protestors in order
to expropriate 10,000 acres of land for a Special Economic Zone (SEZ) to
be developed by the Indonesian-based Salim Group. During this incidence,
police shot dead at least 14 villagers and wounded 70 more including
childrenandwomen.

The above given examples show the controversies associated with SEZs.
No doubts that these commercial hubs started with a lot of premature praise
and have now became a bone of contention which is readily exploited by
the political forces to the detriment of the peasants, who fear losing their
means of livelihood.