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PRESENTATION BY P.C. NAMBIAR Chairman, Export Promotion Council for Export Oriented Units and SEZs, India. ZONE DEVELOPMENT AND OPERATION AN INDIAN PERSPECTIVE. INDIA – FEDERAL SET UP. 29 STATES AND 7 UNION TERRITORIES RULED BY 13 DIFFERENT POLITICAL PARTIES.

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PRESENTATION BY P.C. NAMBIARChairman, Export Promotion Council for Export Oriented Units and SEZs, India

ZONEDEVELOPMENT AND OPERATIONAN INDIAN PERSPECTIVE


India federal set up
INDIA – FEDERAL SET UP

  • 29 STATES AND 7 UNION TERRITORIES RULED BY 13 DIFFERENT POLITICAL PARTIES.

  • INDEPENDENT FEDERAL AUTHORITY ON CERTAIN VITAL ISSUES LIKE LAND USE, LABOUR ,LAW & ORDER ETC.

  • INDEPENDENT STATE TAX LEGISLATIONS.


India federal set up1
INDIA - FEDERAL SET UP

  • SMALLEST STATE SIZE 0.370 Mn Ha

  • LARGEST STATE SIZE 34.226 Mn Ha

  • VARYING RATIO OF LITERACY RATES

  • UNEVEN POPULATION DENSITY

  • 30 LANGUAGES SPOKEN WITH DIFFERENT CULTURE


India demography
INDIA – DEMOGRAPHY

  • LACK OF ADEQUATE INDUSTRIAL, COMMERCIAL AND SOCIAL INFRASTRUCTURE

  • 3 TIER GOVERNANCE ACROSS THE COUNTRY

  • LACK OF ECONOMIC AWARENESS


Introduction
INTRODUCTION

  • ZONE DEVELOPMENT STARTED IN 1965

  • INITIALLY ONLY GOVERNMENT ZONES

  • STATE GOVT DEVELOPED 10 ZONES

  • ONLY ONE PVT ZONE UPTO 2006

  • SEZ ACT 2005 AND SEZ RULES 2006 ENACTED


Sez size sector focus
SEZ SIZE- SECTOR FOCUS

FOR IT/ITES SECTOR MINIMUM BUILT-UP

AREA SPECIFIED

• Category “A” – 1,00,000 Sq Mtr

• Category “B” - 50,000 Sq Mtrs

• Category “C”- 25,000 Sq Mtrs.


Sez size sector focus1
SEZ SIZE – SECTOR FOCUS

  • Multi Product SEZs - 500 Ha

  • Multi Services SEZs – 50 Ha

  • Sector specific SEZs – 50 Ha

  • Port or Airport based SEZs- 50 Ha

    (in smaller and specified sector 25 Ha)

  • BT, Non conventional energy or gems and jewellery , Handicrafts, electronics - 10 Ha


Free trade warehousing zone
FREE TRADE WAREHOUSING ZONE

  • FTWZ – Only FTWZ-40 Ha with a built up area of

    not less than 100,000 sq.mtr)

  • FTWZ can be set up Sector Specific SEZ- ( Max 20%

    of processing area ) in a Multi product SEZ no

    limitation prescribed


Special economic zones in india
SPECIAL ECONOMIC ZONES IN INDIA.

  • FORMALLY APPROVED -564

  • GOVERNMENT SPONSORED-18

  • PRIVATE SEZs - 546

  • --------------------------------------------------------------------

  • NOTIFIED SEZs- 388

  • GOVERNMENT SPONSORED-18

  • PRIVATE SEZs-370

  • --------------------------------------------------------------------

  • OPERATIONAL SEZs – 192

  • GOVERNMENT SPONSORED-18

  • PRIVATE SEZs- 174


Sez location
SEZ LOCATION

  • 9 OUT OF 29 STATES DON’T HAVE SEZ PRESENCE

  • 3 OUT OF 7 UNION TERRITORIES DO NOT HAVE SEZ PRESENCE

  • NO UNIFORM FISCAL BENEFITS OFFERED BY STATES




10 to 20 mn ha size states
10 TO 20 Mn Ha SIZE STATES



Location states not having sezs
LOCATION – STATES NOT HAVING SEZs


Sez location union territories not having sezs
SEZ LOCATION - UNION TERRITORIES NOT HAVING SEZs

ANDAMAN & NICOBAR ISLANDS

DAMAN AND DIU

LAKSHADWEEP


Investment in sezs
INVESTMENT IN SEZs

  • IN THE GOVERNMENT

    SPONSORED SEZs - US$ 4,007 Mn

  • IN THE PRIVATE

    SECTOR SEZs - US$ 46,269 Mn



Direct employment in sezs
DIRECT EMPLOYMENT IN SEZs

  • IN THE GOVT. SPONSORED SEZs- 281,823 persons

  • IN PRIVATE SECTOR SEZs - 995,822 persons.


Sez performance
SEZ PERFORMANCE

  • NUMBER OF SEZ OPERATING UNITS - 3,818

  • EXPORTS AS OF 31.03.2014- US$ 82,346 Mn

  • DOMESTIC SALE IN INDIA AS OF 31.03.2014 –

    US$ 11,386 Mn


Sez sector mix
SEZ SECTOR MIX

Of 192 Operational

  • MULTI PRODUCTS 10%

  • OTHER SECTOR SPECIFIC MANUFACTURING 32%

  • IT/ITES , ELECTRONIC HARDWARE, SEMI CONDUCTOR SERVICES 56%

    • OTHER SERVICES- 2%


Regulation setting up of sez
REGULATION –SETTING UP OF SEZ

  • BY CENTRAL GOVT

  • ISSUANCE OF LETTER OF APPROVAL

  • SEZ NOTIFICATION

  • AUTHORIZE OPERATIONS


Single window mechanism
SINGLE WINDOW MECHANISM

  • BOARD OF APPROVALS AT CENTRAL GOVT LEVEL

  • UNIT APPROVAL COMMITTEE AT STATE LEVEL


Sez development procedure step 1
SEZ DEVELOPMENT PROCEDURE – STEP 1

  • RIGHTFUL POSSESSION OF LAND ON HAND

  • CLEARANCE FROM LOCAL GOVERNMENT

  • APPLICATION TO BOARD OF APPROVALS

  • RECOMMENDATION OF STATE GOVERNMENT

  • LETTER OF APPROVAL

  • NOTIFICATION OF SEZ


Development procedure step 2
DEVELOPMENT PROCEDURE – STEP 2

  • DEMARCATION OF PROCESSING AND NON-PROCESSING AREA

  • MASTER PLAN APPROVAL BY PLANNING AUTHORITY

  • BUILDING LAYOUT AND INFRASTRUCTURE DEVELOPMENT APPROVAL

  • POSTING OF CUSTOMS OFFICERS

  • EXECUTION OF BOND FOR DUTY FREE BENEFITS BY DEVELOPERS/CO-DEVELOPERS


Development procedure step 3
DEVELOPMENT PROCEDURE – STEP 3

  • COMPOUND WALL AROUND PROCESSING AREA

  • LEASING OF AREA TO UNIT HOLDERS

  • LETTER OF APPROVAL TO UNIT

  • EXECUTION OF BOND BY UNITS FOR DUTY FREE BENEFITS

  • PROGRESSIVE REPORTING OF SEZ PERFORMANCE BY DEVELOPER AND UNITS


Good governance
GOOD GOVERNANCE

  • DEVELOPMENT COMMISSIONER /UNIT APPROVAL COMMITTEE – NODAL AGENCY FOR PERMISSIONS AND APPROVALS

  • ASSESSMENT, EXAMINATION AND CLEARANCE MONITORED BY OFFICERS DEPUTED FROM CUSTOMS DEPARTMENT

  • SEZ OPERATIONS MONITORED THROUGH PERIODICAL REPORTING AND M.I.S.


Incentives for sez in india
INCENTIVES FOR SEZ IN INDIA

  • ALL MATERIALS REQUIRED FOR INFRASTRUCTURE DEVELOPMENT BY DEVELOPERS ARE EXEMPT FROM CUSTOMS DUTY , CENTRAL EXCISE DUTY, AND STATE VAT

  • ALL MATERIALS REQUIRED FOR AUTHORISED OPERATIONS BY UNITS ARE EXEMPT FROM CUSTOMS DUTY, CENTRAL EXCISE DUTY AND STATE VAT


Incentives for sez
INCENTIVES FOR SEZ

  • ALL SERVICES RECEIVED IN CONNECTION WITH

    AUTHORIZED OPERATIONS ARE EXEMPT FROM

    SERVICE TAX


Income tax benefits
INCOME TAX- BENEFITS

  • 100% INCOME TAX EXEMPTION FOR A BLOCK OF 10 YEARS OUT OF 15 YEARS FOR DEVELOPERS.

  • 100% INCOME TAX EXEMPTION FOR 1ST FIVE YEARS AND 50% FOR SUBSEQUENT FIVE YEARS (FOR UNITS)

  • REINVESTMENT ALLOWANCE TO THE EXTENT OF 50% OF PLOUGHED BACK PROFITS CARRY FORWARD OF LOSSES(FOR UNITS).


Investment incentives 1
INVESTMENT INCENTIVES-1

  • 100% FOREIGN DIRECT INVESTMENT UNDER AUTOMATIC ROUTE FOR MANUFACTURING SECTOR IN SEZ UNIT

  • NO CAP ON FDI FOR SSI RESERVED ITEMS.

  • SETTING UP OFFSHORE BANKING UNITS ALLOWED IN SEZS

  • 100% INCOME TAX EXEMPTION FOR 3 YEARS AND 50% FOR NEXT TWO YEARS FOR OFF SHORE BANKING UNITS


Investment incentives 2
INVESTMENT INCENTIVES-2

  • EXTERNAL COMMERCIAL BORROWINGS UPTO USD 500 MILLION A YEAR ALLOWED WITHOUT ANY MATURITY RESTRICTION FOR UNITS.

  • EEFC ACCOUNT FOR EXPORT PROCEEDS ALLOWED WITH FREEDOM TO INVEST OVERSEAS.

  • EXEMPTION FROM INTEREST RATE , SURCHARGE ON IMPORT FINANCE.

  • ENVIRONMENTAL CLEARANCE ON PRIORITY.

  • NORMS FOR SEZ SIZE REDUCED TO SUIT INDUSTRIES


Sez development issues
SEZ – DEVELOPMENT ISSUES

  • WHILE THERE IS A CENTRAL SEZ ACT, MANY STATES DON’T HAVE THE CORRESPONDING STATE SEZ ACT

  • NATURAL RESOURCES UNEVENLY DISTRIBUTED

  • 70% POPULATION DEPENDS ON AGRICULTURE AND FOOD PROCESSING SECTOR NOT FULLY DEVELOPED



SERUM BIO-PHARMA PARK SEZ , PUNE , INDIA

INDIA ‘S FIRST BIO-PHARMA SEZ



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