2. PRESENTED BY,
SOP 2- MBA A BATCH
ABIN THOMAS
AKHIL VIJAYAN
MANU CHACKO
PRASANTH.C.NAIR
JIMSHIYA ASARIPPARAMBIL
SINU RAJ
3. SPECIAL ECONOMIC ZONE
• Geographical region that economic and other
laws are free market oriented
• Nation wide rules suspended inside SEZ
• Main goal is increase in FDI and GDP
4. It covers a broad range of specific zones such as:
• Free Trade Zone(FTZ)
• Economic Processing Zones(EPZ)
• Industrial Parks
• Free Ports
5. SALIENT FEATURES OF SEZ
• Self certification for export and import
Import and export movements of goods are based on
self declaration
No routine examination is made unless specific order
from Development Commissioner or authority.
• Sub contracting
A SEZ unit may sub contract a part of it’s product or
production process to different units, even in abroad
6. • Fiscal incentives-Tax
Exemption from excise and customers duty on
procurement of capital assets, consumable stores,
raw-materials from domestic market
Exemption from sales tax, import duty, Income tax,
minimum alternative tax and dividend distribution tax
• Single Window Clearance
Submit regularity documents at single
locations
Less proceedings and save time
7. • Sales in DTA permitted
Domestic Tariff Are
Are within India and outside SEZ
Goods,rejects,remnants etc arising
during manufacturing can be sold on DTA
Duties applicable
8. • Minimum area
Multi product 1000hectors 35%
Multi product(services) 100 hectors 35%
Port and airport 10 hectors 50%
Electricity, hardware
and software including
ITES 10 hectors 50%
• Eligible activities
Manufacturing, trading and service activities
9. HISTORY OF SEZ IN INDIA
• EPZ at Kandla in 1965
• Performance of EPZ fell short due to lack of good
economic policies
• Economic reforms in early 1990’s
• Modern day SEZ came into existence
• SEZ policy
• Results were not desired and manufacturing sector
witnessed a sudden drop in over all growth
• In 1990’s FDI’s deteriorated
• Immature Indian markets
• Lack of investor friendly environment
• Present day SEZ policies
10. SOME OF IMPORTANT SEZ
IN INDIA
INDIA
• Karnataka Biotechnology and Information Technology Services -
SEZ on biotechnology sector in Bangalore's Electronics City, over
an area of 43 acres
• Shree Renuka Sugars Limited - SEZ on sugarcane processing
complex covering 100 hectares, comprising a sugar plant, power
station and distillery, at Burlatti in Belgaum district
11. •Ittina Properties Private Limited and three other - SEZs in IT sector,
covering electronics, hardware and software sectors in Bangalore,
over an area of 15.732 hectares
• Wipro Infotech - SEZ on IT / ITES at Electronics City, Sarajpur
Bangalore
• Hewlett Packard India Software Operation Pvt. Ltd. - SEZ on IT
12. • Food processing and related SEZ services in Hassan, over an
area of 157.91 hectares
• SEZs on pharmaceuticals, biotechnology and chemical
sectors in Hassan, covering of 281.21 hectares
• SEEPZ - Andheri (East), Mumbai
• Khopata - Multi-product, Mumbai
• Navi Mumbai - Multi-product, Mumbai
• Salt Lake Electronic City, West Bengal
• Manikanchan - Jems and jewelery, West Bengal
• Calcutta Leather Complex, West Bengal
• Falta food processing unit, West Bengal
13. IN KERALA
NAME OF DEVELOPERS LOCATION STATE TYPE OF SEZ
14. OBJECTIVES OF SEZ ACT
• Generation of additional economic activity
• Promotion of exports of goods and services
• Promotion of investment from domestic and
foreign sources
• Creation of employment opportunities
• Development of infrastructure facilities
15. ROLE OF SEZ IN INDIAN
ECONOMY
• To provide internationally competitive environment
• To encourage FDI and enhance GDP
• To increase share in global exports
SEZ exports accounting for 26% of India’s total export in
2011.
15
19. MAJOR ISSUES
• Land Acquisition
• Role of State Govt. in Land Acquisition
• Compensation Packages to land owners
• Rehabilitation packages for displaced farmers
• State Govt.’s commitment to create infrastructure
• Time frame for operationalisation
• Control over SEZs
20.
21. ADVANTAGES OF SEZ
• Growth and development
• Attracts Foreign Direct Investment
• Exposure to technology and global market
• Increasing GDP and Economic Model
• Employment opportunities are created
22. DISADVANTAGES OF SEZ
• Land acquistion at very low prices
• Farmers loose their livelihood
• Tax holidays affect GDP
23. ADMINISTRATIVE SETUP
FOR SEZ
• Board of approval- apex body in department
• Each zone is headed by development
commissioner who is also heading approval
committee
• Approval committee at the zonal level dealing
with approval of units in SEZ and other related
issues
24. BOARD OF APPROVAL
• Duty to promote and ensure orderly
development of SEZ
• Chairperson of board-special secretary to
government of India in ministry of commerce and
industry, dept of commerce consists of 18
members and nominee of each state govt.
25. MAJOR FUNCTIONS OF THE
BOARD
• Granting approval or rejecting proposal or modifying the
approvals for establishment of SEZ
• Granting approval of authorised operations by the
developer in the SEZ
• Granting approval to the developers or units for foreign
collaborations and FDI in SEZ for its development
,operations and maintenance
• Granting approval or rejecting of proposal for providing
infrastructure facilities in SEZ
26. DEVELOPMENT COMMISSIONER
• Central government may appoint any of its
officers not below the rank of Deputy Secretary
to government of India as the development
commissioner of one or more special economic
zone
• Every development commissioner shall take all
steps in order to discharge his function to insure
speedy development of SEZ and promotion of
exports
27. MAJOR FUNCTIONS OF
DEVELOPMENT COMMISSIONER
• Guide the entrepreneurs for setting up of units in SEZ
• Ensure and take suitable steps for effective promotion of
exports for SEZ
• Ensure proper coordination with central government or
State Government departments concerned
• Monitor the performance of the developer and units in a
SEZ
28. APPROVAL COMMITTE
• Every SEZ has one approval committee
• 9 members
• Chairperson- Development commissioner
29. MAJOR FUNCTIONS OF APPROVAL
COMMITTE
• Approve the import or procurement of goods from
the Domestic Traffic Area, in the SEZ for carrying
on the authorised operations by the developer
• Approve of services by a service provider, from
outside or from the D.T.A
• Monitor the utilisation of goods and services or
warehousing of trading in SEZ
• Approve, modify or reject proposals for setting up
units for manufacturing or rendering services or
warehousing trading in the SEZ
30. SWOT ANALYSIS OF INDIAN SEZ
STRENGTH
• Based on Western model or SEZ in China
• An established legal redress system
• Relatively low labour costs
• Employment opportunities
• India’s large English speaking and skilled
workforce
• Exposure to technology and global market
31. • Worldwide acceptance of capabilities in fields
like
• Pharmaceutical manufacturing & research
• Clinical trials
• Manufacturing auto parts
• Engineering designing & consultancy, IT & ITES
• Malls and hotels
• Hospital
• Financial & other institutional Networks like
Insurance Companies
32. WEAKNESS
• Poor infrastructure and transport
facilities
• High cost of capital
• Inadequate institutional support
• Political changes
• Inappropriate locations
33. OPPORTUNITIES
• An alternative manufacturing base, particularly
compared to Chinese SEZs
• Investments in core strength areas like IT and
software products and services.
• New small ports & airports are also being
developed keeping SEZ concept in mind
• A large NRI base who have traditionally invested
less in Greenfield development in India
34. THREATS
• The pattern of buying & selling may not
continue. With relocations of industries in other
third world countries, new competitors will
emerge
• opposing interests
• Prospect of even more restrictive labour laws
being introduced
• Increasing rejection rate for proposals to
establish SEZs
35. CONCLUSION
• scope of human capital formation and technology upgrading
•
effects will widen.
• Government to play a pro active role in strengthening these
effects.
• linkages between the domestic economy and Special
Economic Zones.
• Effects of Special Economic Zones are contingent upon the
success of these zones in attracting Foreign Direct
Investment.
