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Guide to SEZ - India
June 2009
2GUIDE TO SEZ – INDIA.PPT
SAMPLE
Executive Summary
Introduction
�SEZ policy introduced in 20--; SEZ bill passed in 20--
�Three types of SEZs present in India – Sector - specific, Multi–product and SEZ in a port/airport
�SEZ area comprises of - Processing Area and Non Processing Area
– Minimum area requirement for setting up SEZs varies from a -b hectares
�There are four different types of SEZ development models - Industrial Parks, Fully Integrated ,
Outsourced Facility and Shared Infrastructure
– Fully integrated model is popular in India
Incentives &
Establishment
Procedure
�Government provide various incentives to promote SEZs. Developers and unit can avail various
tax benefits like exemption from Income tax, customs duty, distribution tax
�SEZs in India are governed by an administrative set up consisting of Board of Approval,
Development Commissioner, SEZ Authority and Approval Committee
�The developer of SEZ and the unit are required to follow certain norms like:
– Conformance to all environmental rules ; Positive net foreign exchange requirement for units; Minimum
requirement of a% stake for developers
SEZ Scenario –
India
�There are 3 stages in approval of SEZ- In-principle approval, Formal approval and Notified SEZs
�Notified SEZs comprise a small proportion of total SEZs
� IT / ITeS sector leads with highest number of formal approvals
�Southern and Western states lead in SEZ development
Performance of
SEZs
�SEZs accounted for over b% share in India’s exports in 20- - --; c% y-o-y growth in SEZ exports
�Gems and Jewelry sector was leading sector in SEZ exports
�Employment in SEZs grew at a rate of d % annually
� Investments in SEZ witnessed a growth of e% per annum
3GUIDE TO SEZ – INDIA.PPT
•Introduction
•Establishment Procedure
•Incentives
•SEZ Scenario – India
•Performance of SEZs
•Upcoming SEZs
•Appendix
4GUIDE TO SEZ – INDIA.PPT
SAMPLE
SEZs can be categorized on basis of sector, function or location
and required to have processing as well as non-processing area
Source:
• Manufacture one or more goods in a
particular sector
• Render one or more services in a
particular sector
• Manufacture multiple goods in one
sector or across multiple sectors
– Trading and warehousing
– Render two or more services in a
sector or multiple sectors
• SEZ in an existing port or airport for
manufacture of goods falling in two or
more sectors or for trading and
warehousing or rendering of services
Sector – Specific SEZ Multi – Product SEZ SEZ in a port or airport
Types of SEZ
SEZ Layout
Processing Area Non - Processing Area
•Processing area is the demarcated area in SEZ
where units can be located for manufacture of
goods or rendering of services
•Minimum processing area has been uniformly
fixed at
� x% for Multiproduct SEZs
� y% for product specific SEZs
•Non-processing area is intended to provide
support facilities to SEZ processing area and
may include:
� Educational institutions
� Hospitals
� Hotels
� Recreation and entertainment facilities
� Residential and business complexes
5GUIDE TO SEZ – INDIA.PPT
Legal framework for setting up SEZ is defined under SEZ Act and
State SEZ policy
Legal
Framework
State SEZ policy
SEZ ACT 2005 SEZ Rules 2006
6GUIDE TO SEZ – INDIA.PPT
SAMPLE
Majority of SEZs under development are less than 49 hectares in
area
SEZ Approval Status
Approval status
Area wise SEZ distribution
Source:
Up to 49
b%101-200
c%50-100 d%
201-500
e%
1000+
a%
f%
501-1000
Approval status area wise
* Area in hectares
w%Notified SEZ
Area in hectares
A u%Formal Approval
B v%In-principle approval
C
D x%Formal Approval
E y%In-principle approval
z%Notified SEZ F
Number of SEZs Total = U Total = X hectares
DefinitionSEZ Status
• Final stage after which physical development
work begins
Notified
• Given when the land has not yet been
secured but all other criteria are fulfilled
In-Principle
Approval
• Given when land is available to set up the SEZFormally
Approved
Notified SEZs
comprise a small
proportion of
SEZs
7GUIDE TO SEZ – INDIA.PPT
SAMPLE
i%
IT/ ITES/ Electronic Hardware
j%Pharma / Chemicals
k%Engineering
l%Multi-Product m%
Textile / Apparel n%Bio Tech
o%
Multi Servicesp%
Others
q%Multi-Product
r%
Textile / Apparels%
Multi Services
t%
IT/ ITES/ Electronic Hardware
Others
u%Engineering
v%FTWZ
w%Auto Related x%Electronic Product
y%
e%Pharma / Chemicalsf%
Textile / Apparel g%Multi Services
h%
Others
a%
IT/ ITES/ Electronic Hardware
b%
Bio Tech
c%Multi-Product
d%Engineering
IT / ITeS SEZs has the maximum number of approved SEZs due to
smaller land requirements compared to other sector
Formally approved SEZs
In-principle approved SEZs
Source:
Total = X
• IT/ITeS sector has highest formal approvals, but
covers only a% of the land area of SEZs
• Almost b-c% of IT/ITeS SEZs are operational
• IT/ITeS sector is popular in SEZs due to:
� Availability of trained manpower
� Smaller land requirement as compared to other SEZs,
which results in speedier land acquisition
� Uncertainty regarding STPI tax exemptions which are due
to expire in 20--
Overview
Notified SEZs
Total = ZTotal = Y
8GUIDE TO SEZ – INDIA.PPT
SAMPLE
Establishment of SEZs have boosted the international trade in
India
•Exports from special economic zones (SEZs)
rose u% during the year to end-March 2009
•It out paced India’s overall exports growth of
just v%
•Superior infrastructure in SEZ has helped
exporters cut costs and remain competitive
Exports Sector wise exports 2007- 08
Exports from SEZ
Source:
NMiscellaneous
OTotal
MNon conventional Energy
LBiotech
KLeather footwear and sports goods
JElectronics
IFood and Agro Industry
HPlastics and Rubber
GTextile and garments
FChemicals and Pharma
EEngineering
DComputer/ Electronic Software
CElectronics Hardware
BTrading and Service
AGems and Jewellery
Exports in INR bnSector
0
300
600
900
0
10
20
E
Y
2007-08
INR bn
A
U
2003-04
B
V
2004-05
C
W
2005-06
D
X
2006-07
% Share
9GUIDE TO SEZ – INDIA.PPT
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