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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