In India the policy for setting up SEZ was introduced on April 1, 2000 with a view to provide an internationally competitive and hassle free environment for exports. The policy offered setting up of SEZ in the public, private, joint sector or by State Governments. These are specially demarcated geographical regions that have more liberal economic laws as compared to the centralized laws of the country.
Special Economic Zone - SEZ is one or more areas of a country where the tariffs and quotas are eliminated and bureaucratic requirements are lowered so that more companies are attracted to the area. The companies establishing in the area also gets extra incentives for doing business.
The essential purpose behind developing a special economic zone like SEZ in India or SEZ in China, primarily in the developing countries is to magnetize mass foreign investments in the country. India Real Estate Investments have attracted huge foreign funds and thus the special economic zones in India have increased by and large.
The SEZ history dates back to 1965 when first export processing zone was set up in Kandla, Maharashtra. That was the instigation of SEZ's in India .
The SEZ Act in 2005 established India Special Economic Zones formally. SEZ notification as mentioned in the SEZ Act includes:
To augment additional economic activity by attracting foreign direct investments
To Promote of exports of goods and services
To promote of investment from domestic and foreign sources
To create more employment opportunities
To develop infrastructure facilities of global standards
The SEZ India Website, SEZ India projects lists both the SEZ advantages and SEZ disadvantages. The SEZ Benefits are:
SEZ's offer economic improvement to the spectrum, the local inhabitants and the country as a whole
Exemption from payment of stamp duty and registration fees on the lease/license of plots to the SEZ developer.
External commercial borrowings of upto 500 million USD a year without any restriction of maturity to the SEZ developers.
Special economic zones and the SEZ projects have instigated certain SEZ controversy and a SEZ debate regarding the SEZ Disadvantages:
Revenue losses due to various tax exemptions and tax benefits awarded to the India special economic zones.
Most Real Estate Developers In India are interested in setting up a SEZ to cash in the India real estate bubble by acquiring SEZ land at cheap rates and creating a land bank for themselves
SEZ India projects
Presently around fourteen major special economic zones functional in India :