SPECIAL ECONOMIC ZONE (SEZ) SWOT ANALYSIS

Sharma

Neha

YadveNdraa

HISTORY OF SEZ
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.
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With the same intentions and view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.

SEZ ?
A Special Economic Zone is a geographically bound zones where the economic laws in matters related to export and import are more broadminded and liberal as compared to rest parts of the country. SEZs are projected as duty free area for the purpose of trade, operations, duty and tariffs. SEZ units are self-contained and integrated having their own infrastructure and support services.

OBJECTIVE OF THE SEZ ACT
ØGeneration of additional economic activity ØPromotion of exports of goods and services ØPromotion of investment from domestic and foreign sources ØCreation of employment opportunities ØDevelopment of infrastructure facilities

LIST OF DEVELOPERS WHO HAVE SET UP SEZS
Ø NokiaSEZ in Tamil Nadu Ø Quark City SEZ in Chandigarh Ø Flextronics SEZ in Tamil Nadu Ø Mahindra World City in Tamil Nadu Ø Motorola, DELL and Foxconn Ø Apache SEZ (Adidas Group) in Andhra Pradesh Ø Divvy's Laboratories, Andhra Pradesh Ø Rajiv Gandhi Technology Park, Chandigarh Ø ETL Infrastructure IT SEZ, Chennai Ø Hyderabad Gems Limited, Hyderabad

‘SEZ LOCATIONS IN INDIA’

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Map- sez.docx

SWOT ANALYSIS FOR INDIAN SEZS
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Strengths

A large and growing domestic market.   Growing middle class with purchase power   India’s large English speaking workforce


Strengths

 Relatively low labour costs  Worldwide acceptance of capabilities in fields like: 1.Pharmaceutical manufacturing & research 2.Clinical trials 3.Manufacturing auto parts 4.Engineering designing & consultancy, IT 5.Entertainment

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Weaknesses

Inadequate institutional support Red Tape Labour reforms Inappropriate locations Infrastructure bottlenecks – connecting infrastructure like Roads leading to SEZs.  Political changes      

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Opportunities

 To use SEZs to catalyze infrastructure development.  New small ports & airports are also being developed keeping SEZ concept in mind.  Realistically establish competitive advantages in SEZs.

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Opportunities

 A large NRI base who have traditionally invested less in Greenfield development in India.   Lower the high transaction /behind the border costs to exporters.   Tap the advantages of WTO/increase India’s small share of world trade.


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Opportunities

 To increase investments in core strength areas like IT and software products and services.

 An alternative manufacturing base, particularly compared to Chinese SEZs.

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‘Threats’

 Loosing edge of low labour costs - many countries are competing.   The pattern of buying & selling may not continue. With relocations of industries in other third world countries, new competitors will emerge.

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‘Threats’

 Prospect of even more restrictive labour laws being introduced (e.g., “Reservations” for socially disadvantaged groups in private sector jobs).   Formation of economic blocks, Effect on Government Revenues.

v v vIt is expected that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities.

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