EXPORT PROCESSING

ZONE
 Introduction
 A free trade zone (FTZ) or export processing zone (EPZ) is
an area of a country where some normal trade barriers such as
tariffs and quotas are eliminated and bureaucratic requirements
are lowered in hopes of attracting new business and foreign
investments.
 It is a region where a group of countries has agreed to reduce
or eliminate trade barriers.
 Free trade zones can be defined as labor intensive
manufacturing centers that involve the import of raw materials
or components and the export of factory products.
Objectives
 To enhance foreign exchange
earnings.

 To develop export-oriented
industries.

 To generate employment
opportunities.

 Stimulate the area's economy.

History
 Free trade zones in Latin America date back to the
early decades of the 20th century.
 The first free trade regulations in this region were
enacted in Argentina and Uruguay in the 1920s.
 The Latin American Free Trade Association (LAFTA)
was created in the 1960 Treaty of Montevideo by
Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and
Uruguay.
Benefits & Incentives
 Access to imported inputs at world(duty-free) prices.
 Allowed exporters to look beyond poor or limited local inputs.
> Could utilize low labor cost for assembly operations based
on superior imported inputs.
 Better industrial park conditions.
 Tax breaks
 Exemption from Central Sales Tax.
 Exemption from Service Tax.
 Single window clearance for Central and State level approvals.
 Duty Deferral
 Duty Elimination
 Weekly Entry procedure 
The Idea has taken off….
 In 1970s only a handful of countries with
EPZs.
 By 1996, 73 countries, and over 500 zones.
 By 2002, 116 countries, and over 3000 zones
43 million people employed.
 Many variants- single industry zone, “special
economy zone”, special factory zone and more.
 Early zones were publicly owned and run.
Now more and more are privately-run.
List of Free Trade Zones
 Jebel Ali Free Zone, Dubai
 Aegean Free Zone, Izmir Turkey
 Aras Free Zone
 Bahrain Logistics Zone, Kingdom of Bahrain
 Bayan Lepas Free Trade Zone, Penang, Malaysia
 Batam Free Trade Zone
 Cavite Export Processing Zone, Rosario, Cavite City, Philippines
 Zona Franca de Manaus, Brazil
 Freeport, Grand Bahama
 Inspira Pharma and Renewable Energy Park, Aurangabad, Maharashtra, India
 Kulim Hi-Tech Park, Kedah, Malaysia
 Maquiladoras, Mexico
 Port Klang Free Zone, Klang, Selangor, Malaysia
 Pacífico
 Pasir Gudang Free Trade Zone, Johor, Malaysia
 Sricity Multi product SEZ, part of Sricity which is a developing satellite city in the
epicentre of Andhra Pradesh & Tamil Nadu.
 Walvis Bay Export Processing Zone, Namibia
 CentrePort Canada Winnipeg
 Slobodna Zona Pirot - Srbija / Free Zone Pirot - Serbia
 Aden
SEZs in India
 - SEEPZ Special Economic Zone
 - Kandla Special Economic Zone
 - Cochin Special Economic Zone
 - Madras Special Economic Zone
 - Visakhapatnam SEZ
 - Falta Special Economic Zone
 - Noida Export Processing Zone
Criticism

 Land acquisition

 Revenue loss

 Loss of agricultural land

 Misuse of land for real estate

 Uneven growth

 Inequities