SEZ is essentially an industrial cluster meant largely for exports.
An SEZ is governed by a special set of rules aimed at attracting direct investment for export-oriented production.
They are also known as ‘Export Processing Zones’ or ‘Free Trade Zones’.
Salient features of SEZs are:
Both manufacturing of goods or service are allowed
No routine examination by customs authorities of export/import cargo
No requirement for import license
Units in SEZs have to become net foreign exchange earners within 3 years
Domestic sales from them are subject to full customs duty and the import policy in force.
Developing self-sustaining industrial townships so that the increased economic activity does not create pressure on the existing infrastructure.
SEZ developer would be responsible for all civic amenities and infrastructure including roads, sewerage, open spaces, green spaces, education facilities, power, water supply and housing etc.
SEZ is an improvement to the concept of Export Processing Zones.
India was one of the 1st in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports
Asia’s first EPZ set up in Kandla in 1965
Aim of SEZ
Need to aggressively promote exports of goods and services in highly competitive global market place to provide sustained growth and creation of formal employment
Create a strong manufacturing base in the country
Improve the balance of trade
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