Group 7 Raman Oberoi 191161 Rangoli Jain 191162 Rahul Sethi 191163 Ritu Agarwal 191164 Rohit Baliyan

191165 Rojit Irom 191166

What is SEZ?

contained geographic regions within countries encourage industry, manufacturing, and services for export more liberal laws and economic policies Especially meant for trade and warehousing

Objectives

For Exclusive growth To increase share in world trade Generation of additional economic activity. Promotion of exports of goods &Services. Promotion of investment from domestic and foreign sources. Creation of employment opportunities. Development of infrastructure facilities

EPZ to SEZ

Inefficient EPZ absence of single window facility within zone Immature market to embrace FIIs and attract FDIs limited power of zonal authorities EPZ converted to SEZ in 2000

SEZ
SEZ's should have an area preferably of 1000 hectares. Duty free goods to be utilize within the approval period of five years. Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units 100% Income Tax exemption on export income for SEZ units for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years. External Commercial Borrowing by SEZ units up to US $ 12500 billion in a year without any maturity restriction through recognized banking channels. Exemption from Central Sales Tax, Service Tax, State sales tax and other levies, dividend distribution tax

Success Stories
SEZ Nokia Special Economic Zone in Tamil Nadu Mahindra City SEZ, Tamil Nadu Apache SEZ (Adidas Group) in Andhra Pradesh Wipro Limited, Andhra Pradesh Mundra Port and Special Economic Zone, Gujarat Reliance Jamnagar Infrastructure Ltd., Gujarat EXPORTS IN Rs (Crores) 10385.3 EMPLOYMENT INVESTMENT FDI in Rs (Crores) Rs (Crores) 2225.4 833.51 14859

1524.56

9383

13 2.5

18 .63

1 2.03

5342

22 .15

16.

586

443

3 1. 01

68.44

8 0

5219.009

9882.28

2385 32082 Ministry of commerce, annual report 2009-2010

Sectors Agro Airport based multiproduct Auto and related Beach & mineral/ metals Bio-tech Building prod./mal./ transport equt. Electronic prod/ind Engineering Footwear/Leather Food Processing FTWZ Gems and Jewellery Handicrafts & Carpets IT/ITES/Electronic Hardware/Semiconductor Metal/Stain. Steel/Alum/Foundry Metallurgical Engineering Multi-Product Multi-Services/Services Non-Conventional Energy Plastic processing Petrochemicals & petro. Pharma/chemicals Port-based multi-product Power/alternate energy/ solar Textiles/Apparel/Wool Writing and printing paper mills Strategic Manufacturing Granite processing Industries and other allied machinery/ manufacturing GRAND TOTAL

Formal approvals 6 3 3 2 33 1 3 21 7 5 11 13 4 353 9 1 23 16 5 0 4 23 8 3 19 2 0 1 582

Notified SEZs 4 0 1 2 2 18 1 3 16 5 4 6 6 2 233 5 0 15 8 4 0 2 20 2 1 12 1 0 1 374

Operational SEZs (Central Govt. + State Govt./Pvt. SEZs + notified SEZs under the Act, 2005) 0 0 1 2 0 2 2 1 7 2 2 0 3 2 75 0 0 16 0 2 0 0 5 2 1 5 0 0 0 130

Aviation/Aerospace/ Animation & Gaming/ Copper 3

Department of commerce annual report 2009-2010

FDIs in India
200000 FDIs in Rs Crores 180000 160000 140000 120000 100000 80000 60000 40000
29235 39674 24367 18406 316 965 1838 4126 7172 13220 10358 10015 9338 19860 27188 103367 140180 176304 161536

20000 0

Source: http://www.rbi.org.in/scripts/PublicationsView.aspx?id=12846

FDIs in Central Govt. SEZs

700
635.18

FDIs
540

600 500
434.31 429.02 385.49 371.58

Govt Private

400 300
238.14 237.36 154.29 135 117.72 87.53 57.38 104.38 76.8

200
137.46

100 0

93.65

101.14

116.48 67.93

8.41

Total FDIs = 895.8

http://www.nsez.gov.in/nsezwebsite/Resources/Employemnt/inv-in-Emp-in-Govt-State-private-established-prior-toSEZs.pdf

Exports
Year SEZ exports Value (Rs. Crore) Growth Total Exports Rate of India (In (over Rs. Crores) previous year )

% of Total exports

% of India s GDP
0.43 0.47 0.53 0.62 1.22 1.69 3.43

2003-2004 2004-2005 2005-2006 2006-20007 2007-2008 2008-2009 2009-2010

13,854 18,314 22 840 34,615 66,638 99,689 2,20,711.39

39% 32% 25% 52% 93% 50% 121.40%

293366.8 375339.5 456417.9 571779.3 655863.5 840755.1 845125.2

4.70 4.88 5.0 6.05 10.16 11.86 26.12

Source: sezindia.nic.in and RBI annual report

Employment
EMPLOYMENT (As on 30th September, 2010) Incremental Employment Total Employment

SEZs Notified under the Act State/Pvt. SEZs set up before 2006 Central Government SEZs
Sezindia.nic.in

3,52,349 persons

3,52,349 persons

50,612 persons

63,080 persons

83,159 persons 4,86,120 persons

2,05,395 persons 6,20, 824 persons

Total

Investments
INVESTMENT
(As on 30th September, 2010) SEZs Notified under the Act State/Pvt. SEZs set up before 2006 Central Government SEZs
Sezindia.nic.in

Incremental investment Rs.1,61,742.99 cr. Rs. 5,581.20 cr. Rs. 4,788.71 cr. Rs.1,72,112.90 cr.

Total Investment Rs.1,61,742.99 cr Rs. 7,337.51 cr Rs. 7,067.91 cr Rs.1,76,148.41 cr

Total

SEZ demerits..!
Revenue foregone on tax incentives to SEZ units in the current fiscal is Rs 5,126 crore, up from Rs 4,233 crore in 2009-10 Loss of fertile lands SEZz becoming centers of Real Estate Not encouraging for SMEs due to location (city outskirts) and size (10 hectares to 1,000 hectares) requirements land acquisition and rehabilitation of the displaced persons

SEZ demerits..!
Loss of fertile lands SEZz becoming centers of Real Estate Not encouraging for SMEs due to location (city outskirts) and size (10 hectares to 1,000 hectares) requirements Labour laws not applicable in SEZs Uneven Growth

SEZ demerits

Are SEZs Meeting their Objectives?

The SEZ policy is not creating a new manufacturing base, since the overwhelming focus is on IT/ITES. The SEZ policy is not likely to create new infrastructure beyond buildings, since most of them are less than one sq, km. and are located in and around industrialised areas. The SEZ policy will exacerbate regional imbalance , since they are being disproportionately located in districts that already have high levels of industrialisation. In some cases, this may encourage firms to move an existing activity from its current location to a SEZ.

Recommendations

Future of SEZs in India

Thank You!