Saturday, July 7, 2007

Special Economic Zones

Special Economic Zone (SEZ) is the latest economic development arena of India. It has been so for years for many other countries. Special Economic Zones (SEZs) have been now in India for over four years. SEZs came into being from 1st November 2000 when four operating Export Processing Zones (EPZs) were converted into SEZs vide Notification by the Govt. of India. Special Economic Zones (SEZs) are geographical regions that have economic laws different from a country's typical economic laws. The goal is usually an increase in foreign direct investment (FDI) in the country.

The benefits including tax benefits, facilities, etc. given to units in a SEZ and the Developer thereof, are widely known. The structure of a SEZ is also defined in the EXIM Policy.

The zones' performance in attracting investment and promoting export competitiveness seems to be directly related with the location, infrastructure facilities, quality of governance and the incentive packages. There should be a vision in the design, establishment and operations of the SEZ. It is necessary to develop zones as industrial clusters of specific products. The backward linkages would benefit the growth of accessories units as well. The zones should specialise in terms of economic activities depending on the availability of human capital, resources and infrastructure in the region. They thus tend to transform into horizontally-integrated industrial clusters, which include industries that might share a common market for the end products, use a common technology or labor force skills, or require similar natural resources. It seems, therefore, that it would be desirable to develop zones as industrial clusters of specific products. This may encourage downstream industries also.

2 comments:

Paul said...
This comment has been removed by the author.
dreamkiller said...

its a good subject to learn. But the information you have provided is very limited. it would be great if u can some more information to this article. Like how they are formed. What kind of tax benefits or other benefits are given ?..not much but at least a little bit of detail.

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