Of late, the Special Economic Zone (SEZ) Act, 2005 has generated considerable interest both among the domestic and the foreign investors that were waiting to establish their respective units in these areas. The article provides a commentary on the relevance of SEZ in the domestic domain and discuses the global scenario pertaining to the same.
In the year 2000, a policy initiative was taken up for the purpose of setting up SEZs in the country that would facilitate competitive and hassle free environment for exports. The units that were to be set up in such zones would primarily be involved in the manufacture of goods and rendering of services. The units set up in these zones were required to be earners of net foreign exchanges. The sales carried out in the Domestic Tariff Area (DTA) by the SEZ units were required to pay full custom duty and were to abide by the import policies in existence. The policy also called for the conversion of the eight existing Export Processing Zones (EPZs) into SEZs. With this view, all the EPZs have been converted into the SEZs. These were the EPZs located at Visakhapatnam (Andhra Pradesh), Falta (West Bengal), Noida (Uttar Pradesh), Madras (Tamil Nadu), Cochin (Kerala), Santa Cruz (Maharashtra), Kandla and Surat (Gujarat). Now, the long awaited SEZ scheme has been approved by the government. However, the implementation of the same calls for complete clarity and display of wisdom on the part of the policy makers and the users of the same. An array of investors is already in the line to benefit from the proposal. Though, there exists enough confusion that has resulted from the EPZs being named as SEZs by authorities. Further, the latest foreign trade policy provides a reflection of yet another name of free trade and warehousing zone. |
