Static Topic: Special Economic Zone

Special Economic Zone (SEZs) are designated zones offering duty-free operations and fiscal concessions to boost investment and jobs. India’s first EPZ began in Kandla (1965), with SEZs officially introduced in 2000 under the 2005 Act.

MAJOR FACILITIES AND INCENTIVES
- Duty-Free Imports: SEZ units benefit from duty-free imports for construction and operations.
- Tax Exemptions: Exemptions include minimum alternate tax and income tax.
- External Commercial Debt: Units can borrow up to $500 million annually without maturity restrictions.
- Single Portal Approvals: Central and state approvals are streamlined through a single portal.
CHALLENGES:
- Unused Land: SEZs face issues with unused land due to the pandemic and decreased demand.
- Multiple Models: Diverse economic zone models complicate integration and management.
- Competition from ASEAN: ASEAN countries have improved policies and skill-building initiatives, affecting India’s SEZ competitiveness.
WAY AHEAD
- Encouraging MSME Investments: Proposals include partnering with MSME initiatives and allowing sector-specific investments.
- Access to Financing: Recommendations include enhancing financing options and granting infrastructure status to SEZS.

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