Special Economic Zone (SEZ)A Special Economics Zone (SEZ) is a geographical region that has economic laws that are more liberal than a country’s typing economic laws. The category ‘SEZ’ covers a board range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates )IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of an SEZ structure is to increase foreign investment. SEZs in India SEZS are Industrial Townships outside the customs duty territory of India. SEZs are synonymous with globalization and meant to ensure a flow of labor and capital from surplus to deficit regions, so that everyone benefits from investment and export promotion. The lower cost of production an SEZ makes exporting from India attractive while offering the unique advantage of servicing a potentially large Indian market at the same time.
SEZs in India are Unique. The SEZ policy framework is the most visionary, ambitious and far-reaching initiative of the Government of India (GOI) so far, designed to transform fundamentally the ‘Foreign Direct Investment (FDI) Landscape’ for all times to come. It aims to provide complete business freedom to large multinational companies which are seeking to globalize their production bases. The central and distinctive anchors of the SEZ policy framework in India cover the following themes:
- 100% tax break/holiday for ten years up to 2010 (in other countries, tax reliefs are regulated).
- Unrestricted access to domestic markets (with payments of applicable duties/taxes).
- The permissible economic activity in SEZ is vast and it covers trading, servicing, reconditioning, labeling, repacking etc.
- 100% foreign ownership automatically cleared in the manufacturing sector. The Chinese SEZs for long have insisted on joint ventures with local partners.