This document provides an overview of Special Economic Zones (SEZs) in India, including their origin, evolution, approval process, incentives, and impacts. It discusses how SEZs have evolved from Export Processing Zones (EPZs) to provide more liberalized policies and incentives. Key points covered include the approval process for SEZ proposals, incentives provided to businesses in SEZs like tax exemptions, and benefits seen so far including increased investment, exports, and employment. Challenges and impacts related to land acquisition and loss of government revenue are also mentioned.

1. SEZs – CONCEPT, STRUCTURE, PROCESS , IMPACT, FUTURE MACRO-ECONOMICS Dr. Gulnar Sharma

5. INTRODUCTION

8. SEZ Approval Consequent upon the SEZ Rules coming into effect w.e.f. 10th February, 2006, Twenty-five meetings of the Board of Approvals have since been held. During these meetings, formal approval has been granted to 462 SEZ proposals. There are 135 valid in-principle approvals. Out of the 462 formal approvals, 222 SEZs have been notified. Benefits derived from SEZs Benefit derived from SEZs is evident from the investment, employment, exports and infrastructural developments additionally generated. The benefits derived from multiplier effect of the investments and additional economic activity in the SEZs and the employment generated thus will far outweigh the tax exemptions and the losses on account of land acquisition. Stability in fiscal concession is absolutely essential to ensure credibility of Government intensions. Exports from the functioning SEZs during the last five years : Year Value (Rs. Crore) Growth Rate ( over previous year ) 2003-2004 13,854 39% 2004-2005 18,314 32% 2005-2006 22 840 25% 2006-2007 34,615 52% 2007-2008 66,638 92%

11. Focus had been on delegating powers to zone authorities, providing additional fiscal incentives, simplifying policy provisions and providing greater facilities. The EXIM Policy (1997-2002) introduced a new scheme from April 1, 2000 for establishment of the Special Economic Zones (SEZs) in different parts of the country. From November 1, 2000 the EPZs at Kandla, Santa Cruz (Mumbai), Cochin and Surat have been converted into SEZs. In 2003, other existing EPZs namely, Noida, Falta, Chennai, Vizag were also converted into SEZs. As on June 2005, 53 SEZs have been approved by the Government of India out of which 11 SEZs are functional and the rest 42 SEZs are under establishment. Contd………. Evolution : from EPZs to SEZs

27. Procedure for establishment of Unit ( if proposal not related to Foreign collaboration and FDI ) Application to Development Commissioner with a copy to developer Development Commissioner shall scrutinise proposal and place before approval committee Approval Committee approve the proposal Development Commissioner will issue a letter of approval in Form G for setting up the unit

28. Procedure for establishment of Unit ( if proposal relates to Foreign collaboration and FDI ) Application to Development Commissioner with a copy to developer Development Commissioner shall scrutinise proposal and place before Board Board shall approve the proposal Development Commissioner will issue a letter of approval in Form G for setting up the unit

37. Forms used A Application for setting up SEZ B Format for letter of approval for SEZ developers C Format for Letter of approval for providing Infrastructure facilities in SEZ D Bond-cum Legal Undertaking for developers E Format for Quarterly and half-yearly report for SEZ developer/co-developer to be furnished to Development commissioner

38. Forms used Contd.. F Consolidated Application Form G Format for letter of approval for Unit H Bond-cum Legal Undertaking for SEZ unit I Annual Performance report for units J Form for Appeal K Permanent Identity Card

48. Flow Chart for Setting up SEZ SEZ can be formed in two ways By Applying to SG By applying to Board of Approval SG forward the Proposal to BOA Obtain the concurrence of SG BOA approves the proposal SG=Sate Government

49. Flow Chart for Setting up SEZ contd .. Central Government shall issue letter of Approval to developer Developer shall furnish to Central Government information about area Central Government will notify the area as SEZ

51. Kinds of SEZ Kinds of SEZ SEZ for multi-product SEZ for specific sector SEZ in a port or airport

52. Minimum Contiguous Area Requirement Type Area for specific states/UT Min.Processing Area Multi-product 1000 hectares 200 hectares 25 % (old) 35% (new) ( may be relaxed to 25% by CG on Board recommendation) Multi -services 100 hectares 100 hectares 25% Sector specific 100 hectares 50 hectares 50% Electronic Hardware and software 10 hectares( and min. built up area of 1 lakh sq.mtrs) 10 hectares and min. built up area of 1 lakh sq.mtrs) 50%

53. Minimum Contiguous Area Requirement Type Area for specific states/UT Min.Processing Area Bio- technology/ Non- conventional energy 10 hectares (old) 10 hectares( with a min. built up area of 40000 sq.m) (new) 10 hectares (old) 10 hectares( with a min. built up area of 40000 sq.m) (new) 50 % Gems and jewellery sector 10 hectares (old) 10 hectares( with a min. built up area of 50000 sq.m) (new) 10 hectares (old) 10 hectares ( with a min. built up area of 50000 sq.m) (new) 50 %

54. Minimum Contiguous Area Requirement Type Area for specific states/UT Min.Processing Area Free Trade and Warehousing Zone - Stand alone 40 hectares (with 1 Lac square meter built up area) 40 hectares (with 1 Lac square meter built up area) 50 %(new) Free Trade and Warehousing Zone - SEZ for a specific sector No minimum area requirement but subject to max area not exceeding 20% of the processing area No minimum area requirement but subject to max area not exceeding 20% of the processing area

75. SMALL SIZE OF EPZs Location Size (Sq.miles) Kandla (Gujarat) 1.17 SEEPZ (Mumbai) 0.15 Cochin (Kerala) 0.16 NOIDA (UP) 0.48 Chennai (TN) 0.41 Vizag (AP) 0.56 Falta (WB) 0.44

76. CURRENT SEZs IN INDIA.