SPECIAL ECONOMIC ZONE

INDEX
Group Members Acknowledgment Introduction to International Business Objectives Introduction to Special Economic Zone History of Special Economic Zone Meaning & Definition of Special Economic Zone Indias Special Economic Zone Types Special Economic Zone Benefits & Limitations of Special Economic Zone Role of State Government in establishment of Special Economic Zone units Various Special Economic Zone units in India Special Economic Zone Act Incentives & Facilities offered to the Special Economic Zone Online Special Economic Zone Benefits of Special Economic Zone Different Articles on Special Economic Zone

GROUP MEMBERS
Ankur Singh Chouhan-5 Renita Coutinho-6 Vishakha Parmar-33 Paulin Merry-34 Heena Shaikh-43 Bhawna Sharma-44 Prateek Saxena-53 Neshel Ashok-54

ACKNOWLEDGEMENT
We would like to express our gratitude to all who have shared their valuable time and helped us directly or indirectly in the preparation of this project. We hereby acknowledge all those who directly or indirectly helped us to draft the project report. It would not have been possible for us to complete the task without their help and guidance. First of all we would like to thank The SIES College of Commerce & Economics for introducing Banking & Insurance course there by giving us the opportunity to specialize in Banking and Insurance field. We would also like to thank our Principal Dr. Minu Thomas and coordinator Professor Shailashri Uchil who gave us the opportunity to do this project work. We express our sincere gratitude towards our project guide Professor Falguni Mathews for her unlimited support and guidance and non-teaching staff. Finally, we wish to thank our friends and our parents and all those people who have lent us a helping hand in completing this project whose names are to numerous to mention here.

INTRODUCTION TO INTERNATIONAL BUSINESS

International Business conducts business transactions all over the world. These transactions include the transfer of goods, services, technology, managerial knowledge, and capital to other countries. International business involves imports. exports and International Business is also known, called or referred as a Global Business or an International Marketing. An international business has many options for doing business, it includes, 1. Exporting goods and services. 2. Giving license to produce goods in the host country. 3. Starting a joint venture with a company. 4. Opening a branch for producing & distributing goods in the host country. 5. Providing managerial services to companies in the host country.

In international business, all the operations are conducted on a very huge scale. Production and marketing activities are conducted on a large scale. It first sells its goods in the local market. Then the surplus goods are exported. International business integrates (combines) the economies of many countries. This is because it uses finance from one country, labour from another country, and infrastructure from another country. It designs the product in one country, produces its parts in many different countries and assembles the product in another country. It sells the product in many countries, i.e. in the international market. International business is dominated by developed countries and their multinational corporations (MNCs). At present, MNCs from USA, Europe and Japan dominate (fully control) foreign trade. This is because they have large financial and other resources. They also have the best technology and research and development (R & D). They have highly skilled employees and managers because they give very high salaries and other benefits. Therefore, they produce good quality goods and services at low prices. This helps them to capture and dominate the world market. International business gives benefits to all participating countries. However, the developed (rich) countries get the maximum benefits. The developing (poor) countries also get benefits. They get foreign capital and technology. They get rapid industrial development. They get more employment opportunities. SPECIAL ECONOMIC ZONE is one of the important part of INTERNATIONAL BUSINESS, explained in detail in further part.

OBJECTIVES
The objective of doing this project is to understand the following aspects, which are State the basis of SPECIAL ECONOMIC ZONE Discuss the history of SPECIAL ECONOMIC ZONE Meaning & Definition of SPECIAL ECONOMIC ZONE Indias SPECIAL ECONOMIC ZONE Types of SPECIAL ECONOMIC ZONE Role of State government in the establishment of SPECIAL ECONOMIC ZONE Various units of SPECIAL ECONOMIC ZONE

INTRODUCTION TO SPECIAL ECONOMIC ZONES

A AS Sp pe ec ciia all E Ec co on no om miic cZ Zo on ne e is a geographically bound zones where the economic laws in matters related to export and import are more broadminded and liberal as compared to rest parts of the country. SEZs are projected as duty free area for the purpose of trade, operations, duty and tariffs. SEZ units are self-contained and integrated having their own infrastructure and support services. Within SEZs, a units may be set-up for the manufacture of goods and other activities including processing, assembling, trading, repairing, reconditioning, making of gold/silver, platinum jewellery etc. As per law, SEZ units are deemed to be outside the customs territory of India. Goods and services coming into SEZs from the domestic tariff area or DTA are treated as exports from India and goods and services rendered from the SEZ to the DTA are treated as imports into India. E Ex xa am mp plle es s of SEZS are Kandla Special Economic Zone Kandla, Gujarat Multi product, SEEPZ Special Economic Zone Mumbai, Maharashtra Electronics and Gems and Jewellery, Noida Special Economic Zone Uttar Pradesh Multi product.

HISTORY
The seeds of the basic concept of Special Economic Zone (SEZ) were sown in the mid sixties. Indian Special Economic Zone was structured with the establishment of the first Export Processing Zone (EPZ) at Kandla in the year 1965. Several other Export Processing Zones were set up at various parts of India in the subsequent years. The lack of good Government of India economic policy and inefficient management soon became the detrimental factors for the success of these Export Processing Zones. Thus, the performance of these Export Processing Zones of India fell short of expectations. The modern day Special Economic Zone came in to existence because the economic reforms incorporated in the early 1990s did not resulted in the overall growth of the Indian economy. The SEZ policy of India was devised to act as a catalyst to promote the economic growth attained in the early 1990. The economic reforms incorporated during the 1990s did not produce the desired results. The Indian manufacturing sector witnessed a sudden dip in the overall growth of the industry, during the second-half of 1990s. The History of SEZs in India suggests that red tape, lengthy administrative procedures, rigid labor laws and poor physical infrastructural facilities were the main cause of deterioration of Foreign Direct Investments (FDI) inflow in to India. Further, the Indian markets were not mature enough to facilitate easy entry of Foreign Institutional Investors (FIIs) in to the Indian economic system. Furthermore, the legal framework of Indian economy was not strong enough to prevent misuse of Indian markets by the foreign investors. Thus, the lack of investor friendly environment in India prevented growth of Indian industry, in spite of implementation of

liberal economic policy by the central government. This resulted in the formation of a much larger and more efficient form of their predecessors with world-class infrastructural facility. The History of SEZs in India suggests that the present day Special Economic Zone policies of India are well complimented by the provisions of the Acts and Rules of Special Economic Zone. A number of meetings were held across India for the formulation of 'The Special Economic Zones Act, 2005', which was subsequently passed by Parliament in May 2005. The SEZ Act, 2005 and SEZ Rules became effective on and from 10th February 2006. The SEZ Act 2005 defines the key role for the State Governments in Export Promotion and creation of infrastructural facilities. A Single Window SEZ approval mechanism has been facilitated through a 19 member inter-ministerial SEZ Board of Approval or BOA. And the decision of the SEZ Board of Approval is binding and final.

DEFINITION
SPECIAL ECONOMIC ZONES can be defined as a Designated areas in countries that possess special economic regulations that are different from other areas in the same country. Moreover, these regulations tend to contain measures that are conducive to foreign direct investment. Conducting business in a SEZ usually means that a company will receive tax incentives and the opportunity to pay lower tariffs.

MEANING
A Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone.

INDIAS SEZ
India was one of the first countries 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. In order 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. To instill confidence in investors and signal the Government's commitment to a stable SEZ policy regime and with a view to impart stability to the SEZ regime thereby generating greater economic activity and employment through the establishment of SEZs, a comprehensive draft SEZ Bill prepared after extensive discussions with the stakeholders.

TYPES OF SEZ
The category SEZ covers, including free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, urban enterprise zones and others.. F Fr re ee eT Tr ra ad de eZ Zo on ne es s( (F FT TZ Z) ):: A free trade zone (FTZ) or export processing zone (EPZ), also called foreign-trade zone, formerly free port is an area within which goods may be landed, handled, manufactured or reconfigured, and reexported without the intervention of the customs authorities. Free-trade zones are organized around major seaports, international airports, and national frontiersareas with many geographic advantages for trade. F Fr re ee eP Po or rt ts s( (F FP P) ):: Free economic zones or free zones or special economic zones (SEZ) refer to designated areas in which companies are taxed very lightly or not at all in order to encourage economic activity. Sometimes they are called free ports, which have historically been endowed with favorable customs regulations, e.g., the free port of Trieste. Very often free ports constitute a part of free economic zones.

IIn nd du us st tr riia all P Pa ar rk k( (IIP P) ):: An industrial park (also known as industrial
estate, trading estate) is an area zoned and planned for the purpose of industrial development. An industrial park can be thought of as a more "lightweight" version of a business park or office park, which has offices and light industry, rather than heavy industry .

BENEFITS & LIMITATIONS OF SPECIAL ECONOMIC ZONES

B Be en ne ef fiit ts s

15 year corporate tax holiday on export profit 100% for initial 5 years, 50% for the next 5 years and up to 50% for the balance 5 years equivalent to profits ploughed back for investment. Allowed to carry forward losses. No licence required for import made under SEZ units. Duty free import or domestic procurement of goods for setting up of the SEZ units. Goods imported/procured locally are duty free and could be utilized over the approval period of 5 years. Exemption from payment of Service Tax. The sale of goods or merchandise that is manufactured outside the SEZ (i.e, in DTA) and which is purchased by the Unit (situated in the SEZ) is eligible for deduction and such sale would be deemed to be exports. The SEZ unit is permitted to realize and repatriate to India the full export value of goods or software within a period of twelve months from the date of export.

Write-off of unrealized export bills is permitted up to an annual limit of 5% of their average annual realization. No routine examination by Customs officials of export and import cargo. Setting up Off-shore Banking Units (OBU) allowed in SEZs. OBU's allowed 100% income tax exemption on profit earned for three years and 50 % for next two years. Exemption from requirement of domicile in India for 12 months prior to appointment as Director. Since SEZ units are considered as public utility services, no strikes would be allowed in such companies without giving the employer 6 weeks prior notice in addition to the other conditions mentioned in the Industrial Disputes Act, 1947. The Government has exempted SEZ Units from the payment of stamp duty and registration fees on the lease/license of plots. External Commercial Borrowings up to $ 500 million a year allowed without any maturity restrictions. Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.

L Liim miit ta at tiio on ns s

Revenue losses because of the various tax exemptions and incentives. Many traders are interested in SEZ, so that they can acquire at cheap rates and create a land bank for themselves. The number of units applying for setting up EOU's is not commensurate to the number of applications for setting up SEZ's leading to a belief that this project may not match up to expectations.

ROLE OF STATE GOVERNMENT IN ESTABLISHMENT OF SEZ

State Governments play a very active role to play in the establishment of SEZ unit. Any proposal for setting up of SEZ unit in the Private / Joint / State Sector is routed through the concerned State government who in turn forwards the same to the Department of Commerce with its recommendations for consideration. Before recommending any proposals to the Ministry of Commerce & Industry (Department of Commerce), the States Government properly checks all the necessary inputs such as water, electricity, etc required for the establishment of SEZ units. The State Government has to forward the proposal with its recommendation within 45 days from the date of receipt of such proposal to the Board of Approval.The applicant also has the option to submit the proposal directly to the Board of Approval. Representative of the State Government, who is a member of the Inter-Ministerial Committee on private SEZ, is also consulted while considering the proposal

VARIOUS SEZ UNITS IN INDIA

Currently, there are about 143 SEZs (as of June 2012) operating throughout India and an additional 634 SEZs (as of June 2012) that have been formally/principally approved by the Government of India. Some of them are as follows: SEEPZ Special Economic Zones , Mumbai, Maharashtra Kandla Special Economic Zones, Kandla, Gujarat Cochin Special Economic Zones, Cochin, Kerala Madras Special Economic Zones, Chennai, Tamil Nadu Visakhapatnam SEZ, Vishakhapatnam, Andhra Pradesh Falta Special Economic Zones, Falta, West Bengal Noida Export Processing Zones, Uttar Pradesh

Santacruz Electronics Export Processing Zone (SEEPZ):

ABOUT US
SEEPZ was set up on 1st May, 1973 as uni- product EPZ exclusively for manufacture and export of electronic items in an area of 100 acres of land. Santacruz Electronics Export Processing Zone (SEEPZ) is a Special Economic Zone in Mumbai, India. Situated in the Santacruz East area. Seepz was created in 1973 and was seen as export processing zone. It was leased through the Maharashtra Industrial Development Corporation (MIDC), Andheri (East). The objective were (a) Accelerating the progress of electronics manufacturing in India and (b) To take advantage of the growing electronics world market

Aar Pee Centre, MIDC, Nr. Seepz, in Andheri East, Mumbai

The Govt. of India decided to permit manufacture and export of Gem & Jewellery items from SEEPZ during 1987-88, considering the high potential and the pollution-free nature of Gem & Jewellery Industry which soon gave a glamorous twist to SEEPZ. In 2000, Government of India decided to set up new Special Economic Zone convert some of the existing Export Processing Zones to Special Economic Zones. SEEPZ was one of the three Export Processing Zones converted as Special Economic Zone w.e.f. 1st November, 2000. More than 150 units operate in SEEPZ which includes: Navteq, Renaissance Jewellery Ltd, GoldStar Jewellery Pvt. Ltd, Gitanjali Gems Ltd, Vaibhav Gems Ltd, and Ddamas for Jewelry. IT Companies include Blue Star Infotech Ltd, Praxis Interactive Services Ltd, CGI Group Inc., Thirdware, iGATE Computer Systems, Tata Consultancy Services, Geodesic Limited, Trigyn Technologies Limited, Syntel Limited,

The Regale by Tunga

LOCATION
Located in the heart of metropolitan Mumbai, SEEPZ-SEZ has access to Mumbai's vast commercial, industrial and social infrastructure, its efficient communication network, SEEPZ-SEZ is just 6 kilometres away from Mumbai's International airport at Sahara, Mumbai sea port is 30 kilometers away from the zone. SEEPZ-SEZ is also well connected from various parts of city by local trains and the urban transport service.

Kalpataru Square is a premium commercial project located off Andheri-Kurla road, Andheri (E).

INFRASTRUCTURE IN THE ZONE

Sprawling infrastructure of SEEPZ-SEZ is spread over 111 acres and consists of 7 Standard Design Factories 3 Gem & Jewellery Factories 2 Towers in SEEPZ++ area

 One multi-storeyed building with a built up area of 4 lakh sq. ft. Plots Are leased for 30 years and built up area is leased for five years on renewable basis. At present, the lease rent charged for built up area is Rs. 1590/- per sq. meter. p.a. and for plots Rs. 70/- per sq. meter. p.a. As SEEPZ SEZ get uninterrupted power supply from generating stations of Western Maharashtra. The Zone has also an assured supply of 4.6 mld. Of water a day. SEEPZ SEZ is also provided with hi-tech "secured lease lines" that enables the Units to communicate and video conference over satellite The Minerals and Metal Trading Corporation of India (MMTC) has its strong room within the premises of the SEEPZ SEZ for security and quick delivery of precious metals. MMTC also offers gold to gem and Jewellery exporters for sale or on loan basis. It is an export manufacturing hub with an in-house Customs clearance facility to deliver their air and sea consignments well in time without any hassles and through simplified procedures. It has a well groomed security system including a high security entrance to avoid any pilferage of duty free goods and a dedicated Fire Station.

Current: Holy Family High School, Andheri (East). EXPORT PERFORMANCE The Zone commenced its operation in Sept. 1974 with five units commencing exports.

Year 2007-08 2008-09 2009-10 2010-11 2011-12

Export (Rs. in Crores) No. of Unit in Production 11,268 (-) 6.47% 10,134 (-) 10.06% 10,151 0.17% 11,582 14.10% 12,607 8.85%

Growth 245 264 287 311 319

in

Oberoi Splendor

EMPLOYMENT IN SEEPZ-SEZ
The total direct employment in the zone is approx. 85,000 persons.The role of SEEPZ SEZ is exemplary as about 40% of the employment in the Zone is of female employees both in Gem & Jewellery and Hardware Sector, which goes a long way in the local Community Welfare Ackruti City launches Hillcrest located strategically opposite SEEPZ

NAVI MUMBAI SPECIAL ECONOMIC ZONE:

The government of India accorded approval to the proposal of City and Industrial Development Corporations of Maharashtra Limited (CIDCO) to set up a Special Economic Zone in Navi Mumbai. Government of Maharashtra directed CIDCO to implement the Navi Mumbai SEZ through joint venture and that the strategic partner/investor is selected through a competitive bidding process.

CIDCO selected a Preferred Bidder/Strategic Investor Consortium, which formed a company named Dronagiri Infrastructure Private Limited (DIPL) under the Companies Act, 1956.

Flats in Ulwe

Sincee then DIPL& CIDCO together have formed a Special Purpose

Company (SPC) in the year 2004 named Navi Mumbai SEZ Private Limited (NMSEZ) (formerly known as Navi Mumbai SEZ Development Company Private Limited) with DIPL holding 74%and CIDCO holding 26% stakes in NMSEZ. NMSEZ has the right to plan, design, construct, market, operate & maintain, administer & manage the SEZ, which is being set up covering a land area of 2140 ha in Navi Mumbai.

INFRASTRUCTURE
The Navi Mumbai Special Economic Zone (NMSEZ) is a specialduty free enclave [spread over an area of 2,140 Ha, across 3 nodes of Navi Mumbai i.e. Dronagiri (1,390 Ha), Ulwe (400 Ha) and

Kalamboli (350 Ha)] designed to promote foreign investments in a comprehensive range of economic activities - from manufacturing at one end to trading and financial services on the other - in an unfettered business environment.

Shreenath Estate Consultants

Commercial buildings in NMSEZ

THE BEST POSTIONED SEZ IN INDIA

Navi Mumbai SEZ, located in close proximity to Mumbai, the commercial and financial capital of India, is being developed within the growing Navi Mumbai region in the State of Maharashtra and is well- positioned with respect to connectivity, trade, commerce and resources. Proximity to Mumbai thereby having access to Finance , the commercial center and financial capital of India, Trading centres for many products like diamonds, gems, jewellery and apparels; Skilled manpower from reputed national and international educational institutions Huge urban markets Mumbai,

Proximity to infrastructure

international

and

domestic

transportation

1) SeaportsLocated very close to one of Indias largest and most modern seaports- Jawaharlal Nehru Port, Proximity to Mumbai Port and Proposed Rewas Port, being developed in close proximity 2) AirportsChhatrapati Shivaji International Airport at Sahar, is at a distance of around 45 km from Navi Mumbai SEZ;

International Airport, NMSEZ Second Mumbai International Airport, planned to be set by the year 2016, in Ulwe is adjacent to Ulwe (airport) Node of Navi Mumbai and will be accessible within 10mins from Dronagiri and Kalamboli Nodes. 3) Road and rail linkageMumbai- Pune Expressway skirts the Kalamboli Node; The Sion- Panvel Highway Mumbai Trans Harbour Link planned as a six- lane dual carriageway road bridge connecting Sewri on Mumbai side to have on Navi Mumbai side; Rail infrastructure- Proximity to Central Railway Link, Konkan Railway, Suburban Harbour Link Nerul Uran suburban link 4) Water TransportProposed water transport, linking south Mumbai to Navi Mumbai SEZ is expected to boost accessibility to the area

ULWE Proposed International Airport; JNPT Port; NMSEZ

NMSEZ NODES:
DRONAGIR: KALAMBOLI: ULWE (WATERFRONT) SEZ ULWE (AIRPORT) SEZ

MAHINDRA WLD CITY CHENNAI :

About MWC Chennai
Mahindra World City, New Chennai A City with the distinction of being Indias first Integrated Business City and corporate Indias first operational Special Economic Zone. Mahindra World City, New Chennai has attracted marquee clients such as BMW, B.Braun, CapGemini, Lincoln Electric, Infosys, Wipro and the TVS Group of Companies. Spread over 1550 acres, Mahindra World City, New Chennai is located on the Golden Quadrilateral (NH 45) and is set amongst hills, natural lakes and a forest reserve. The City combines stateoftheart facilities for business with worldclass facilities for retail, leisure, hospitality and residential housing.

Promoters
The promoters were Mahindra Group is a leading industrial house with diverse business interests. The Groups core businesses include Automobiles, Trading and Finance, Infrastructure Development. Tamil Nadu Industrial Development Corporation Ltd. (TIDCO) is a Government of Tamil Nadu undertaking. It has been a catalyst in accelerating the industrial growth of Tamil Nadu

The Mahindra World City Advantage:

Mahindra World City is strategically located in a fast developing industrial corridor near Chennai, Tamil Nadu one of Indias fastest growing economies. The plug-n-play format makes it simple for a company to integrate into Mahindra World City Highlights of Plug and Play Infrastructure A clean and stress free environment Ready to build levelled land 6-lane, 4-lane, 2-lane road network Railway station on campus

 Onsite 230 KV substation for fail safe power OFC backbone for data / telecom from 4 service providers Bhatia, BSNL, Reliance, VSNL Potable Water Modern waste management network 24 x 7 security for common areas Operations and maintenance of campus

Infosys: IT company Mahindra World City provides for a clean, pollutionfree environment. With close to 30% of the land reserved for roads and open spaces, Mahindra World City is probably the only business park where youll find business in perfect harmony with nature.

BUSINESS ZONES Overview

The Business Zone is divided into a Domestic Tariff Area (DTA) and three sectors specific Special Economic Zones for IT (Services & Manufacturing), Auto Ancillaries and Apparel and Fashion Accessories. The Domestic Tariff Area (DTA) provides facilities for companies to set up manufacturing units to cater to the needs of the domestic market. The Special Economic Zone status ensures that companies get the advantage of fiscal benefits, tax holidays, and proactive support from the government, an onsite customs office and self certification process.

Mega infrastructural project

Gathway to south india

Pondicherry Special Economic Zone (SEZ)

Om Metals Infraprojects Ltd is a conglomerate having diverse business activities and interests related to Hydro mechanical equipments, turnkey solutions for steel fabrication, Hydro power developments, Real Estate, Leasing, Finance, Entertainme nt centres, Hotels and tourism. High quality infrastructure, liberal and supportive business policies can further promote foreign investments and enhance the domestic and regional export oriented businesses in Pondicherry. Thus, an opportunity to create and develop a Special Economic Zone at Pondicherry. OmMetals first Infrastructure Project is the mammoth Pondicherry Special Economic Zone (SEZ) and port project.

Sez DE Pondy

Mudra Port in Pondicherry

An exclusive integrated industrial and residential township. Christened as SEZ DE PONDY, the Special Economic Zone (SEZ) project comprises of an area of 860 acres. The entire project master planned by internationally acclaimed Jurong Consultants Pte , Singapore SEZ DE PONDY provides excellent modules of eco-friendly and healthy environment for the development of business communities.

Deep Seaport at Puducherry

Sez DE Pondy features:

Plotted Development Flatted Development IT/ITES E-publishing Biotech / Sciences Life

School / Education city Value Retail Spa & Sports 5/4/3 star Hotel International Residential School Hospital Shopping Mall Multiplexes /

Medical tourism & cosmetic surgery

Apparel & Fashion Logistics and Warehousing

Residential Houses

Location

Chennai international airport is just 2 hours drive from Pondicherry Pondicherry is linked through a broad gauge railway line with Chennai Pondicherry airport is under expansion,expected to become operationalise by Feb. 2009 One of the finest deep sea ports is already under development

Pondicherry industrial promotiion development

SEZ ACT
A comprehensive draft SEZ Bill prepared after extensive discussions with the stakeholders. A number of meetings were held in various parts of the country both by the Minister for Commerce and Industry as well as senior officials for this purpose. The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. The draft SEZ Rules were widely discussed and put on the website of the Department of Commerce offering suggestions/comments. Around 800 suggestions were received on the draft rules. After extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th February, 2006, providing for drastic simplification of procedures and for single window clearance on matters relating to central as well as state governments.

OBJECTIVES OF SEZ ACT

The main objectives of the SEZ Act are:
(a) generation of additional economic activity (b) promotion of exports of goods and services; (c) promotion of investment from domestic and foreign sources; (d) creation of employment opportunities; (e) development of infrastructure facilities; It is expected that this will trigger a large flow of foreign and domestic investment in SEZs, in infrastructure and productive capacity, leading to generation of additional economic activity and creation of employment opportunities. The SEZ Act 2005 envisages key role for the State Governments in Export Promotion and creation of related infrastructure. The SEZ Rules provide for different minimum land requirement for different class of SEZs. Every SEZ is divided into a processing area where alone the SEZ units would come up and the non-processing area where the supporting infrastructure is to be created.

INCENTIVES AND FACILITIES OFFERED TO SEZ

The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:1) Import and export duty exemptions. 2) 100 percent exemption from income for the first five years, 50 percent tax exemptions for the next two years and up to 50 percent of reinvested profits for subsequent three years. 3) External commercial borrowing by SEZ units upto US $ 500 million in a year without any maturity restriction through recognized banking channels. 4) Exemption from Service Tax and Central Sales Tax. 5) Liberalized labour laws at the discretion of the respective state governments. 6) Exemption from State sales tax and other levies as extended by the respective State Governments. 7) Exemption from customs/excise duties for development of SEZs for authorized operations.

8) A stable and extensive supply of electrical, water, transportation and IT infrastructure within the areas. 9) 100 percent foreign equity ownership in numerous industries.

10) Import of capital goods, raw materials, consumables and spares are exempted from customs duty. 11) No routine examination by Customs on cargo to be exported or imported.

Benefits offered by SEZ to the economy :

T Ta an ng giib blle eb be en ne ef fiit ts s :: 1) Contribution to respective States GDP(Gross Domestic Product) 2) Employment generation (Direct & Indirect) 3) Creation of world class self contained infrastructure 4) Improve fiscal position of the state due to consequential benefitscascading effect on economic activity 5) Increase in States revenues from VAT (Value added tax), Property taxes, Stamp Duty etc. IIn nt ta an ng giib blle eb be en ne ef fiit ts s :: 1) National and International recognition as Preferred Investment Destination 2) Facilitates urbanization shift from agriculture to industry 3) Creation of high quality social infrastructure 4) Reduction in pressure on existing urban infrastructure

5) 6) 7) 8) 9)

Better standard of living Improved competitiveness of the local industry Absorption of latest technology and managerial capabilities Environmental benefits from planned developments. Rehabilitation of Project Affected Persons.

ONLINE SEZ
As a part of the e-Governance initiative, Ministry of Commerce (MOC) has entered into a formal agreement with NSDL Database Management Limited (NDML) for establishing and managing a nationwide integrated solution for administration of Special Economic Zones (SEZ) of India. Government of India (GOI) has identified that a strong and well-functioning Special Economic Zone (SEZ) is a critical element for the growth aspirations of our country. Therefore GOI has put in place comprehensive SEZ Act and Rules streamlining and simplifying the administrative and legal infrastructure to encourage export oriented business out of the SEZ. Exim Policy provides for speedy transactions and transparency in activities by reducing physical interface by using of modern technology solutions of online electronic transaction processing and payment through the electronic fund transfer. Such measures can also help in building an electronic database on the performance of the SEZ units and the duty/ tax exemptions that was provided to the SEZ units.

Keeping in line with the expectation of Exim Policy of enabling electronic processing of transactions, the SEZ Online will enable online submission and processing of all applications and claims processed under SEZ Act. SEZ Online is a total integrated solution offered by NDML for the administration of SEZ to facilitate speedy processing of various transactions that SEZ developers/units have with SEZ administration.

SEZ ONLINE SYSTEM FEATURES

SEZ Online system is a web based application that will enable the users to carry out various functions using internet. Users can access it anytime, from anywhere, wherever internet connection is available. Every application submitted through SEZ Online system shall be assigned a unique identification no. (System generated) which may be used to track the status of the application henceforth. While filling up any application form online, after entering few details, the user may save the contents. On save, the request id gets generated by the system. If all the required details of the application are not available or it is intended to complete the application at a later time, the user can do so by logging into the system later. This ensures convenience of the users.

 O Op pe er ra at tiio on na all F Fe ea at tu ur re es s

The system has the necessary security feature to ensure that the authorized users have access only to authorized functions and all approvals are made by the authorized user id. All applications and claims submitted and processed online through SEZ Online system shall be digitally signed by the users using a Digital signature certificate (DSC) for security reasons. This is also essential to ensure Legal Sanctity.

T Te ec ch hn niic ca all F Fe ea at tu ur re es s

The system maintains audit trail of all approvals and performed actions such as log-in, log-out, and data updates. Password Management: Strong Password Management policy including password complexity structure password expiry, password history etc. is implemented.

BENEFITS OF ONLINE SEZ

There are some benifits which SEZ online provides to exporters they are as follows

R Re ed du uc ct tiio on n iin nO Op pe er ra at tiio on na all C Co os st ta an nd dT Tu ur rn na ar ro ou un nd dT Tiim me e::

SEZ online will facilitate online clearance of both imports and exports by the DC, which will significantly reduce the cost and time. Thus, this will provide an online bond register. R Re ed du uc ct tiio on n iin nC Co om mp plliia an nc ce eC Co os st t:: Compliance reporting like submission of Quarterly/Annual Performance Reports etc. will be quite simple and will minimize need for multiple clarifications with the office of DC.

F Fa as st te er rC Clle ea ar ra an nc ce es s:: Most of the clearances required including application for establishing units, claims, LUT extension etc will be online.

IIm mp pr ro ov ve em me en nt t iin ne ef ff fiic ciie en nc cy y& &t tr ra an ns sp pa ar re en nc cy y iin nS Se er rv viic ce et to oE En nd d U Us se er rs s:: This online facility will ensure that the interaction with the office of DC will be online and the users will receive online alerts (email / SMS) for any exception which will help to resolve the issues with minimum delay.

R Re ep po os siit to or ry yo of fa allll t tr ra an ns sa ac ct tiio on ns s/ / iin nt te er ra ac ct tiio on ns sw wiit th hD DC C''s sO Of ff fiic ce e The system shall have a record of all the interactions which any end user has had with the DC's office. The system shall have a repository of all the transactions with the DC's office with respect to material movement within the SEZ.

D Da as sh hb bo oa ar rd da an nd dM MIIS Sf fo or rM MO OC Ca an nd dD DC Cs s SEZ Online will provide aggregate information across all SEZs which will act as Decision Support System for Policy formulation. It will also facilitate monitoring of end users.

DIFFERENT ARTICLES ON SEZ

S SE EZ Z lla an nd dw wiillll a at tt tr ra ac ct t iin nv ve es st tm me en nt t''
T TN NN N| |F Fe eb b6 6,, 2 20 01 13 3 PUNE: The state will attract more investments from industries as land under denotified special economic zones (SEZs) will now be available for reallotment under the forward looking new industrial policy of the state, said chief minister Prithviraj Chavan on Tuesday. Chavan said the state government has chalked out comprehensive plans for expansion of its infrastructure and industry should benefit from it. "The exit route which the state has offered to SEZs which could not go operational will release sizeable stretches of land where new industrial units can come up," he said at the inauguration of Japanese tyres major Bridgestone's green field manufacturing facility at Chakan, located 45 km from here. This is Bridgestone's second plant in India after the one at Indore in Madhya Pradesh which was opened in 1996. The chief minister said that when a multinational company invests in a location it brings with it a set of management practices and work culture that enhances the caliber of local professionals. "The industries should also keep in mind the interests and aspirations of local citizens and accommodate them in any possible manner to improve the quality of their life," Chavan said. He, however, made it clear that the government will not expect the industries to relax their entry qualification and skill level norms while considering local

youth for employment. People-oriented projects under the corporate social responsibility initiatives will be helpful, he suggested. Chavan said that Bridgestone may consider setting up a research and development centre at Chakan to utilize the large pool of talent in the engineering and sciences domains. With proper orientation and training in Bridgestone's Japan research and development facilities, the youngsters will work wonders, he said. Indian economy, like economies elsewhere in the world, has suffered from the slowdown but it has continued to grow, Chavan said. The fiscal and other measures implemented by the government will lead to restoring the 8% growth rate for the economy in the next year, he said. Bridgestone has planned an investment of Rs 2,600 crore in the facility which went operational on Tuesday. The plant will have an installed capacity to manufacture 10,000 passenger car tyres and 3,000 truck and bus radial tyres per day. Hiromi Taniagawa, managing director of Bridgestone India Private Limited, said the company has invested Rs 1,600 crore so far and will complete the investment in stages. Taniagawa said the production will begin with 5,000 car tyres per day and the production of bus and truck tyres will start in October. The full capacity of 10,000 car tyres will be commissioned by end of 2014 and that of truck and bus tyres by 2017.

IIn nd du us st tr riie es s iin nS SE EZ Ze ex xe em mp pt te ed df fr ro om me elle ec ct tr riic ciit ty yd du ut ty y T TN NN N| |F Fe eb b3 3,, 2 20 01 13 3,, 0 01 1..4 45 5A AM M IIS ST T HYDERABAD: In a big boost to industries that are located in Special Economic Zones, the energy department on Saturday issued orders exempting them from electricity duty with immediate effect. A notification in this regard was issued by energy principal secretary M Sahoo. The industrial units located in SEZs have been granted exemption from payment of electricity duty in respect of power generated and consumed by them, subject to the condition that the electricity generated by the said units is utilised by them only. At present, these captive units set up in SEZs are paying 25 paise as electricity duty on every unit they consume. The development commissioner of Visakhapatnam SEZ, where large numbers of pharma, auto and manufacturing units are located, raised the point that there was no private SEZ developer except the AP Industrial Infrastructure Corporation (APIIC) in the state and that in the majority of the cases, the developer provide power to the industrial units by purchasing it from state-owned discoms. He then requested the government to extend the exemption already given to the captive power units to units set up in the SEZs developed by the APIIC. Accordingly, GO No.8 has been issued to extend the exemption to SEZ units on par with captive units. This will have a very positive effect on units set up at SEZs. These units are now paying huge amounts as electricity duty, said industry sources.

K Ko ok ka ap pe et t IIT TS SE EZ Zt to ob be ea ar re ea alliit ty ys so oo on n T TN NN N| |F Fe eb b1 1,, 2 20 01 13 3,, 0 02 2..2 20 0A AM M IIS ST T HYDERABAD: With all legal wrangles settled with regard to Kokapet land, the proposed Special Economic Zone (SEZ) for information technology (IT) firms is likely to become a reality soon. The information technology and communications (IT&C) department is also keen on taking up the SEZ in Kokapet. Official sources said a high-level review meeting of the IT&C department, to be chaired by chief minister N Kiran Kumar Reddy, would discuss Kokapet IT SEZ issue along with other issues on Friday. The meeting is likely to decide whether fresh allotments should be done for IT companies as some firms had opted out due to court cases or earlier firms should also be given a chance to make payment for the land. The SEZ was conceived by the erstwhile Hyderabad Urban Development Authority (Huda) in 2007 in an extent of 118 acres in Kokapet. The proposed SEZ was considered as an extension of Hi-Tec City and Gachibowli to promote IT/IT-enabled services (ITeS) in the city. When the authority invited IT firms to set up shop there in 2007, 11 companies, including search engine giant Google, had come forward to take land on lease. Google was allotted 20 acres, Sonata Software Limited 7.04 acres, Intelli Group Asia Pvt Ltd four acres, Patni Computer Systems Pvt Ltd 24 acres, Conexant was given 4.36 acres, C-Bay Systems (India) Pvt Ltd 6.42 acres, Cognizant Technology

Solutions 9.05 acres, Infinite Computer Solutions Pvt Ltd 4.85 acres, Tech Mahindra 8.43 acres, Qualcomm 7.34 acres and DQ Entertainment Ltd 2.87 acres. As per the proposal, the land was allotted to them on 20-year lease at Rs 25 lakh per acre lease rent per annum and another Rs 25 lakh per acre was to be collected to provide basic infrastructure like roads, water, electricity and other facilities at the SEZ. A link road from Shankarpally to Vattinagulapally, providing connectivity to the Outer Ring Road (ORR), was also planned. All firms except Qualcomm paid a part of the amount. Since the land got embroiled in litigation over ownership, five firms Patni Computer Systems, Conexant, Tech Mahindra, Qualcomm and Cognizant Technology Solutions opted out from the SEZ. HMDA officials said some land in the proposed SEZ was free from any legal wrangles and the authority asked the IT firms to take possession of land and start construction of their buildings, but none put up structures. "The court verdict on Kokapet land title came in favour of the HMDA in July 2012. We waited for 90 days as there was a chance for appeal on the verdict and court granting stay. Since the authority got relief in the court and the appeal time was over, the HMDA wants to push the IT SEZ project," a senior estate officer said.

G Go ov vt tt to ot ta ak ke eb ba ac ck k lla an nd df fr ro om mB Br ra ah hm ma an nii IIn nf fr ra at te ec ch h T TN NN N| | JJa an n2 27 7,, 2 20 01 13 3,, 0 04 4..4 47 7A AM M IIS ST T HYDERABAD: The Kiran Kumar Reddy government on Saturday decided to resume the land from Brahmani Infratech Pvt Ltd for nonimplementation of the IT SEZ project for which it was allotted 250 acres of land in Kancha Imarat, Ravirala village of Maheswaram mandal of Rangareddy district, by the YSR government in 2006. According to sources, the promoter had claimed that he was unable to execute the project and accordingly, agreed to surrender the land that was given for the project near Shamshabad airport.Nava Bharat Ventures Ltd, the parent company of Brahmani, could not get a codeveloper for the project and hence decided to forego it, sources said. As per the memorandum of understanding (MoU) that the stateowned AP Industrial Infrastructure Corporation (APIIC) entered into with Brahmani Infratech on July 12, 2006, the company was to commence construction of the project within 12 months, develop and construct a minimum area of 4.5 million square feet of IT/ITES/ICT space over a period of five years and generate employment for 45,000 people. Of this, 20,000 people shall be provided employment within three years from the commencement of the project and the rest in the next two years. The APIIC handed over the land to the company the very next day after the MoU was signed. However, since the company did not comply with the MoU, Brahmani was served a notice for nonimplementation of the project as per the terms and conditions of the

agreement. As the company had requested for a surrender of the land, the government decided to resume the land, so that it could be put to effective use. Accordingly, APIIC will resume the land from the private player in the coming weeks.

CONCLUSION
With new generation Special Economic Zones emerging, the scope of human capital formation and technology upgrading effects will widen. It is therefore important for the government to play a pro active role in strengthening these effects. For the contribution of Special Economic Zones to various aspects of human development to be realized, it is important to forge linkages between the domestic economy and Special Economic Zones. Systematic efforts need to be made to help zone units forge links with the outside units. Also, the effects of Special Economic Zones are contingent upon the success of these zones in attracting investment, in particular, Foreign Direct Investment. A comprehensive policy framework is required to attain this. The government has to ensure that strategies are developed in a timely manner to strengthen the opportunities that are likely to emerge, protect interests of the Special Economic Zones workers, and forge linkages between Special Economic Zones and the domestic economy.

BIBLIOGRAPHY
W We eb bs siit te es s http://www.scribd.com/doc/19060313/SEZ http://www.authorstream.com/Presentation/ashu.saini123-172486sez-education-ppt-powerpoint/ http://www.alfainternational.com/files/tbl_s12Publications%5CFileU pload92%5C95%5CSEZs.pdf

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