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EXPORTS IN SEZs GROWN BY 92%

Submitted by TheIndiaStreet on June 2, 2008 - 8:39am.
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By: BHARAT RATNA

Exports from Special Economic Zones had registered an extraordinary growth rate of 92% in 2007-08 while it was 52% in the previous year of 2006-07. The major share of SEZs exports are Gems & Jewellery, Trade and Service, Computer/Electronic Software and Hardware sectors.  

The exports has grown from Rs. 34,615 Crores (2006-07) to Rs.66,638 Crores in 2007-08.India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965.  With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and  an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy  was announced in April 2000.

 

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes

 

Exports from the functioning SEZs during the previous years are as under:
Year Value (Rs. Crore) Growth Rate
( over previous year )
2003-2004 13,854 39%
2004-2005 18,314 32%
2005-2006 22 840 25%
2006-07 34,615 52%
2007-08 66,638 92%

SECTORWISE GROWTHGem and Jewellery, Trade and Service, Computer/Electronic Software and Hardware are the major share of exports in SEZs.  Its share was 82.5% out of its total exports. The others are textiles. Chemicals, engineering, etc. and these sectors share was 17.5%.  Some of the sectors like ceramics, tobacco had minimal share in the total exports. Sectorwise breakup of Physical Exports (2007-08) from Special Economic Zones in india 
  Govt. SEZs State Govt/Pvt SEZs prior to SEZ Act, 2005  SEZs notified under SEZ Act.  Total
Biotech     159.45 159.45
Computer/ Elecronic software 2663.38 1046.24 275.64 3985.26
Electronics hardware 1408.53 6313.34 3399.45 11121.32
Electronics 518.71     518.71
Engineering 886.81 421.87 343 1651.68
Gems and Jewellery 15979.98 7025.93 0.15 23006.06
Chemicals & Pharmaceuticals 1069.49 20.33 333.23 1423.05
Handicrafts   30.33   30.33
Plastic and rubber 354.97 302.69   657.66
Leather, footwear and sports goods 190.79   46.23 237.02
Ceramics 24     24
Food and Agro Industry 645.58     645.58
Non-conventional Energy     126.01 126.01
Trading and service 14073.22 6793.75   20866.97
Textiles and garmerns 1135.69 101.16 79.76 1316.61
Tobacco related products 9.5 8.98   18.48
Misc 314.66 103.23 431.59 849.48
Total 39275.31 22167.85 5194.51 66637.68
  • Total employment in SEZs: 3,36,235 Lakh persons
     
  • Total incremental employment generated in SEZs since Feb., 2006: 2,01,531 persons
  • Total investment in Special Economic Zones as of 31.3. 2008: Rs. 77210 crore
Incentives and facilities offered to the SEZsThe incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:-
  • Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units
  • 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
  • Exemption from minimum alternate tax under section 115JB of the Income Tax Act.
  • External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels.
  • Exemption from Central Sales Tax.
  • Exemption from Service Tax.
  • Single window clearance for Central and State level approvals.
  • Exemption from State sales tax and other levies as extended by the respective State Governments.  
  • The major incentives and facilities available to SEZ developers include:-
  • Exemption from customs/excise duties for development of SEZs for authorized operations approved by the BOA.
  • Income Tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act.
  • Exemption from minimum alternate tax under Section 115 JB of the Income Tax Act.
  • Exemption from dividend distribution tax under Section 115O of the Income Tax Act.
  • Exemption from Central Sales Tax (CST).
  • Exemption from Service Tax (Section 7, 26 and Second Schedule of the SEZ Act).
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