• 14th Pravasi Bharatiya Divas, Bengaluru
  • 14th Pravasi Bharatiya Divas, Bengaluru
  • A Coffee Table publication titled, "20 Mission Drive Social Impact Innovations" produced by Economic Diplomacy Division was released by the Hon'ble Prime Minister
  • Hon'ble Prime Minister Sh. Narendra Modi felicitating the 20 innovators selected through the MEA-NITI Aayog National Social Innovation Contest.
  • Global Technology Summit 2016 Click here for details
  • Global Technology Summit 2016 Click here for details
  • Ministry of External Affairs organises India-Latin Americas and the Caribbean (LAC) Conclave in Guadalajara, Mexico to enhance economic cooperation between India and LAC countries.
  • Ministry of External Affairs organises India-Latin Americas and the Caribbean (LAC) Conclave in Guadalajara, Mexico to enhance economic cooperation between India and LAC countries.
  • Global Technology Summit 2016 Click here for details
  • National Contest on Social Innovation, Pravasi Bhartiya Divas 2017
  • The Framework Agreement of the International Solar Alliance was opened for signing on 15 November 2016. On the first day of its opening 16 countries have signed the framework agreement. More countries are expected to sign the framework agreement in the coming days.
  • MEA - ED and BM Divisions along with Cll organized the India- Myanmar Business Roundtable on 19 October 2016 in New Delhi
  • ED Division continues MEAs engagement with Africa by sponsoring the India Africa Health Sciences Meet in New Delhi
  • 18 member multi-sector delegation from Nanjing, China interacting with Shri Nagaraj Naidu, Director & HOD, ED on 16 August 2016
  • Hon'ble Minister for External Affairs chaired Pravasi Bhartiya Diwas Panel-6 on "Edu, S&T & Innovation" on 30 July 2016. The Panel discussed tech solutions for societal problems, edu for tomorrow and Start Ups.
  • Hon'ble Prime Minister inaugurated investment guides for Indian investors who wants to do business with Kenya and Mozambique during his recent tri-nation visit to Africa. The publication was brought by ED Division with support from Indian Missions in Kenya and Mozambique.
  • Indian dignitaries at the inauguration of India pavilion at INNOPROM exhibition in Yekaterinburg Russia
  • ED Division facilitated visit of a Chinese delegation led by Mr Wang Hao, Mayor of Chaoyang district of Beijing Municipality and arranged meetings with officials of Municipal Corporation of Gurgaon and FICCI on 21 June 2016. (Press Release)
  • ED Division facilitates meeting of CEO of the British Columbia Investment Management Corporation Mr Gordon Fyfe and Team with Hon'ble Transport Minister Shri Nitin Gadkari and CEO NITI Aayog Shri Amitabh Kant on 16 June 2016
  • ED Division facilitates meeting of CEO of the British Columbia Investment Management Corporation Mr Gordon Fyfe and Team with Hon'ble Minister of Finance, Shri Arun Jaitley and CEO NITI Aayog Shri Amitabh Kant on 16 June 2016
  • Inter-Ministerial Meeting on Pharmaceuticals and Healthcare Sector in Africa
  • BRICS India 2016
  • Smt. Harsimrat Kaur Badal, Minister of Food Processing & Industry briefing representatives of foreign Embassies on opportunities in food processing sector in India in a meeting facilitated by ED Division on 17 March 2016 at Panchsheel Bhawan, New Delhi.
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Industry & Sectors

Special Economic Zones

Fact Sheet on Special Economic Zones

Number of Formal approvals 589
Number of Notified SEZs (as on 17 July 2012) 389 (out of 589) + (7 Central Govt. + 12 State/Pvt. SEZs)
No. of Valid In-Principle Approvals 48
Operational SEZs (as on 31st March 2012) 153 (Break up: 17 are multi product SEZs, remaining are IT/ITES, Engineering, electronic hardware, textiles, Biotechnology, Gem & Jewellery and other sector specific Special Economic Zones)
Units approved in SEZs (as on 31st March 2012) 3,400
Land for SEZs Notified SEZs Formally Approved (FA) including notified SEZs
47,190 Hectare 71,502 Hectare
Land is a state subject. Land for SEZs is procured as per the policy and procedures of the respective State Government.

Investment (as on 31st March 2012)

Incremental Investment

Total Investment

SEZs Notified under the Act

US$ 32.79 billion

US$32.79 billion

State/Pvt. SEZs set up before 2006

US$ 1.06 billion

US$ 1.37 billion

Central Government SEZs

US$ 1.65 billion

US$ 2.06 billion

Total

US$ 35.54 billion

US$ 36.27 billion

     

Employment

(as on 31st March 2012)

Incremental Employment Total Employment

SEZs Notified under the Act

5,52,048 persons

5,52,048 persons

State/Pvt. SEZs set up before 2006

66,547 persons

79,015 persons

Central Government SEZs

91,617 persons

2,13,853 persons

Total

7,10,212 persons

8,44,916 persons

Source: Special Economic Zoness in India,Ministry of Commerce & Industry,Department of Commerce

Export Performance of SEZs

Exports from SEZs

 

 

2010-11

 

% of Total production

2011-12

 

% of Total production

 

DTA Sale (Counted for +ve NFE)

29093.02

8.11

32472.70

8.00

DTA Sale (Not counted for +ve NFE)

13881.20

3.87

29664.83

7.00

Total Exports

3,15,867.85

---

364477.73

-----

Source:Special Economic Zoness in India,Ministry of Commerce & Industry,Department of Commerce

SEZs: An Overview

The Government of India announced the introduction of Special Economic Zones in April 2000 to achieve the following objectives:

  • Generation of additional economic activity
  • promotion of exports of goods and services
  • Promotion of investment from domestic and foreigh sources
  • Creation of employment opportunities
  • Development of infrastructure facilities

Special Economic Zone (SEZ) is defined as "a specifically delineated duty free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs". SEZs are an acknowledgement of the potential of export-led development strategy in accelerating economic growth.

The Indian SEZ policy provides for the development of these zones in the Government, private or joint sector. This offers equal opportunity to both Indian and international private developers. Units may be set up in SEZ for manufacture of goods and rendering of services. The units in the zone have to be net foreign exchange earners but they shall not be subjected to any pre-determined value addition or minimum export performance requirements.

The Government has converted eight Export Processing Zones located at Kandla and Surat (Gujarat), Cochin (Kerala), Santa Cruz (Mumbai-Maharashtra), Falta (West Bengal), Madras (Tamil Nadu), Visakhapatnam (Andhra Pradesh) and Noida (Uttar Pradesh) into Special Economic Zones and all are functional now. In addition, 3 new Special Economic Zones approved for establishment at Indore (Madhya Pradesh), Manikanchan - Salt Lake (Kolkata) and Jaipur have since commended operations.

Administrative Set Up

The functioning of the SEZs is governed by a three tier administrative set up. The Board of Approval is the apex body and is headed by the Secretary, Department of Commerce. The Approval Committee at the Zone level deals with approval of units in the SEZs and other related issues. Each Zone is headed by a Development Commissioner, who is ex-officio chairperson of the Approval Committee.

Once an SEZ has been approved by the Board of Approval and Central Government has notified the area of the SEZ, units are allowed to be set up in the SEZ. All the proposals for setting up of units in the SEZ are approved at the Zone level by the Approval Committee consisting of Development Commissioner, Customs Authorities and representatives of State Government. All post approval clearances including grant of importer-exporter code number, change in the name of the company or implementing agency, broad banding diversification, etc. are given at the Zone level by the Development Commissioner. The performance of the SEZ units is periodically monitored by the Approval Committee and units are liable for penal action under the provision of Foreign Trade (Development and Regulation) Act, in case of violation of the conditions of the approval.

Incentives and Facilities to SEZ Developer

The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:-

  • Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
  • 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
  • Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
  • External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
  • Exemption from Central Sales Tax.
  • Exemption from Service Tax.
  • Single window clearance for Central and State level approvals.
  • Exemption from State sales tax and other levies as extended by the respective State Governments.

The major incentives and facilities available to SEZ developers include:-

  • Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
  • Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
  • Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
  • Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
  • Exemption from Central Sales Tax (CST).
  • Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).

Operational Special Economic Zones in India

To view list of Operational Special Economic Zones in India,Click here

Approved Special Economic Zones in India

To view list of Approved Special Economic Zones in India,Click here

FDI Policy on SEZ

FDI up to 100% is allowed through the automatic route for all manufacturing activities in Special Economic Zones (SEZs), except for the following activities:

  • Arms and ammunition, explosives and allied items of defence equipment, defence aircraft and warships
  • Atomic substances
  • Narcotics and psychotropic substances and hazardous chemicals
  • Distillation and brewing of alcoholic drinks
  • Cigarettes/cigars and manufactured tobacco substitutes
  • Sectoral norm as notified by Government shall apply to foreign investment in services

SEZ Act 2005

Special Economic Zone Act 2005 came into force with effect from 10th February 2006, with SEZ rules legally vetted and approved for notification. It is an act to provide for the establishment, development and management of the Special Economic Zones for the promotion of exports and for matters connected therewith or incidental thereto. The SEZ rules provide for drastic simplification of procedures and for single window clearance on matters relating to Central as well as State Governments.

The salient features of the Special Economic Zone Act 2005 are highlighted here:

  • Exemption from customs duty, excise duty, etc. on import/domestic procurement of goods for the development, operation and maintenance of SEZs, and the units therein.
  • 100 percent income tax exemption for 5 years, 50 percent for the next five years and 50 percent of ploughed back export profits for five years thereafter for SEZ units.
  • Exemption from capital gains on transfer of an undertaking from an urban area to SEZ.
  • 100 percent income tax exemption to SEZ developers for a block of 10 years in 15 years.
  • Exemption from dividend distribution tax to SEZ developers
  • 100 percent income tax exemption for 5 years and 50 percent for the next five years for offshore banking units located in SEZs
  • A provision for setting up of International Financial Services Centre in SEZ has been proposed with the same incentives and facilities as available to offshore banking units.
  • Exemption to SEZ developer and units from Minimum Alternate Tax
  • CST Exemption to SEZ developer and units on inter-state purchase of goods
  • Constitution of an authority for each SEZ with a view to providing greater administrative, financial and functional autonomy to these zones. However, no such authority is envisaged for an SEZ established by any person or State Government.
  • Establishment of designated courts and a single enforcement agency to ensure speedy trial and investigation of offences committed in SEZs.
  • Encouragement to State Governments to liberalize State laws and delegate their powers to the development commissioners of the SEZ to facilitate single window clearance.

Full text of the SEZ Act 2005

Develop SEZs

Setting up of SEZ

To download application form for setting up of SEZ Enterprise in India Click here

How to Apply

Any individual, co-operative society, company or partnership firm can file an application for setting up of Special Economic Zone. The application is to be made in Form-A to the concerned State Government and the Board of Approval (BOA) in the Department of Commerce, Government of India. However the application would be considered by the BOA only when the State Government recommendation is received.

Minimum area requirements for setting up a SEZ are as follows:

 

Multi Sector SEZ

1000 hectares

Sector Specific SEZ

100 hectares

Free Trade and Warehousing Zones

40 hectares

IT/ITES/handicrafts SEZ Bio-technology/
non-conventional energy/gems and jewellery Sector

10 hectares

 

Once the BOA gives formal approval and the concerned Development Commissioner gives an inspection report certifying the contiguity and vacancy of the area, the area is notified as SEZ.

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DOING BUSINESS IN INDIA

A study has been done by Ernst and Young India with the intention of providing an overview of the investment climate, taxation, forms of business organisations, and business and accounting practices in India.

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