Special Economic Zone
                     Special 
Economic 
Zone
Introduction
Special economic zones (SEZs) are 
widely used in most developing and 
many developed economies. In these 
geographically delimited areas, 
governments facilitate industrial activity 
through fiscal and regulatory incentives 
and infrastructure support.
Source: economictimes.indiatimes.com
Idea behind 
SEZ
The idea was to promote exports from 
the country and realising the need that 
level playing field must be made 
available to the domestic enterprises and 
manufacturers to be competitive globally.
Source: economictimes.indiatimes.com
What is a Special 
Economic 
Zone(SEZ)?
Special Economic Zone (SEZ) is a 
specifically delineated duty-free enclave 
and shall be deemed to be foreign 
territory for the purposes of trade 
operations and duties and tariffs. In order 
words, SEZ is a geographical region that 
has economic laws different from a 
country's typical economic laws. Usually 
the goal is to increase foreign 
investments.
Source: economictimes.indiatimes.com
Where are 
SEZs located 
in India?
At present there are eight functional 
SEZs located at Santa Cruz 
(Maharashtra), Cochin (Kerala), Kandla 
and Surat (Gujarat), Chennai (Tamil 
Nadu), Visakhapatnam (Andhra Pradesh), 
Falta (West Bengal) and Noida (Uttar 
Pradesh) in India. Further an SEZ in 
Indore (Madhya Pradesh) is now ready for 
operation.
Source: economictimes.indiatimes.com
Who can set 
up SEZs?
Any private/public/joint sector or state 
government or its agencies can set up an 
SEZ. Also, a foreign agency can set up 
SEZs in India.
Source: economictimes.indiatimes.com
Who monitors the 
functioning of the 
units in SEZ?
The performance of the SEZ units are 
monitored by a unit approval committee 
consisting of development commissioner, 
custom and representative of state 
government on an annual basis.
Source: economictimes.indiatimes.com
Special features 
for business 
units that come 
to the zone
Business units that set up establishments 
in an SEZ would be entitled for a package 
of incentives and a simplified operating 
environment. Besides, no license is 
required for imports, including second 
hand machineries.
Source: economictimes.indiatimes.com
Will it be possible 
to supply to other 
units in SEZ?
Yes. Inter-unit sales are permitted as per 
the SEZ policy. A buyer procuring from 
another unit pays in foreign exchange.
Source: economictimes.indiatimes.com
How do SEZs help 
a country's 
economy?
SEZs play a key role in rapid economic 
development of a country. 
In the early 1990s, it helped China and 
there were hopes (perhaps never very 
high ones, admittedly) that the 
establishment in India of similar export-
processing zones could offer similar 
benefits -- provided, however, that the 
zones offered attractive enough 
concessions.
Source: economictimes.indiatimes.com
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