Dr.

Shashi Bhushan

Kalindi College, Depatment of Geography

University of Delhi, India

Email Id: shashi.jnu86@gmail.com

Contact Number:+919953514250

Special Economic Zone

What Is a Special Economic Zone—SEZ
A special economic zone is an area in a country that is subject to unique economic regulations
that differ from other regions of the same country. The SEZ regulations tend to be conducive
to foreign direct investment (FDI). Conducting business in an SEZ typically implies that
the company will receive tax incentives and the opportunity to pay lower tariffs.

Special Economic Zones Explained

SEZs are zones intended to facilitate rapid economic growth by leveraging tax incentives to
attract foreign dollars and technological advancement. While many countries have set up SEZs,
China has been the most successful in using SEZs to attract foreign capital. China has even
declared an entire province, Hainan, to be an SEZ.

Fast Facts

 SEZs are subject to unique economic regulations that differ from other areas in the same
country.
 SEZs are supposed to facilitate rapid economic growth by leveraging tax incentives to
attract foreign investment and spark technological advancement.
 The first four SEZs in China were all based in the southeastern coastal region,
including Shenzhen, Zhuhai, Shantou, and Xiamen.

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone
(EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. With a view
to overcome the shortcomings experienced on account of the multiplicity of controls and
clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view
to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was
announced in April 2000.

This policy intended to make SEZs an engine for economic growth supported by quality
infrastructure complemented by an attractive fiscal package, both at the Centre and the State
 level, with the minimum possible regulations. After extensive consultations, the SEZ Act, 2005,
supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic
simplification of procedures and for single window clearance on matters relating to central as
well as state governments. The main objectives of the SEZ Act are:

 generation of additional economic activity

 promotion of exports of goods and services
 promotion of investment from domestic and foreign sources
 creation of employment opportunities
 development of infrastructure facilities

The SEZ Rules provide for:

 " Simplified procedures for development, operation, and maintenance of the Special Economic
Zones and for setting up units and conducting business in SEZs;
 Single window clearance for setting up of an SEZ;
 Single window clearance for setting up a unit in a Special Economic Zone;
 Single Window clearance on matters relating to Central as well as State Governments;
 Simplified compliance procedures and documentation with an emphasis on self certification\

At present there are eight functional SEZs located at Santa Cruz (Maharashtra), Cochin (Kerala),
Kandla and Surat (Gujarat), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta
(West Bengal) and Noida (Uttar Pradesh) in India. Further an SEZ in Indore (Madhya Pradesh) is
now ready for operation.

In addition 18 approvals have been given for setting up of SEZs at Positra (Gujarat), Navi
Mumbai and Kopata (Maharash .. Nanguneri (Tamil Nadu), Kulpi and Salt Lake (West Bengal),
Paradeep and Gopalpur (Orissa), Bhadohi, Kanpur, Moradabad and Greater Noida (UP),
Vishakhapatnam and Kakinada (Andhra Pradesh), Vallarpadam/Puthuvypeen (Kerala), Hassan
(Karnataka), Jaipur and Jodhpur ( Rajasthan) on the basis of proposals received from the state
governments.