guide to sez - india - sample

Guide to SEZ - India

June 2009

2GUIDE TO SEZ – INDIA.PPT

SAMPLE

Executive Summary

Introduction

�SEZ policy introduced in 20--; SEZ bill passed in 20--

�Three types of SEZs present in India – Sector - specific, Multi–product and SEZ in a port/airport

�SEZ area comprises of - Processing Area and Non Processing Area

– Minimum area requirement for setting up SEZs varies from a -b hectares

�There are four different types of SEZ development models - Industrial Parks, Fully Integrated ,

Outsourced Facility and Shared Infrastructure

– Fully integrated model is popular in India

Incentives &

Establishment

Procedure

�Government provide various incentives to promote SEZs. Developers and unit can avail various

tax benefits like exemption from Income tax, customs duty, distribution tax

�SEZs in India are governed by an administrative set up consisting of Board of Approval,

Development Commissioner, SEZ Authority and Approval Committee

�The developer of SEZ and the unit are required to follow certain norms like:

– Conformance to all environmental rules ; Positive net foreign exchange requirement for units; Minimum

requirement of a% stake for developers

SEZ Scenario –

India

�There are 3 stages in approval of SEZ- In-principle approval, Formal approval and Notified SEZs

�Notified SEZs comprise a small proportion of total SEZs

� IT / ITeS sector leads with highest number of formal approvals

�Southern and Western states lead in SEZ development

Performance of

SEZs

�SEZs accounted for over b% share in India’s exports in 20- - --; c% y-o-y growth in SEZ exports

�Gems and Jewelry sector was leading sector in SEZ exports

�Employment in SEZs grew at a rate of d % annually

� Investments in SEZ witnessed a growth of e% per annum


•Introduction

•Establishment Procedure

•Incentives

•SEZ Scenario – India

•Performance of SEZs

•Upcoming SEZs

•Appendix


SAMPLE

SEZs can be categorized on basis of sector, function or location

and required to have processing as well as non-processing area

Source:

• Manufacture one or more goods in a

particular sector

• Render one or more services in a

particular sector

• Manufacture multiple goods in one

sector or across multiple sectors

– Trading and warehousing

– Render two or more services in a

sector or multiple sectors

• SEZ in an existing port or airport for

manufacture of goods falling in two or

more sectors or for trading and

warehousing or rendering of services

Sector – Specific SEZ Multi – Product SEZ SEZ in a port or airport

Types of SEZ

SEZ Layout

Processing Area Non - Processing Area

•Processing area is the demarcated area in SEZ

where units can be located for manufacture of

goods or rendering of services

•Minimum processing area has been uniformly

fixed at

� x% for Multiproduct SEZs

� y% for product specific SEZs

•Non-processing area is intended to provide

support facilities to SEZ processing area and

may include:

� Educational institutions

� Hospitals

� Hotels

� Recreation and entertainment facilities

� Residential and business complexes


Legal framework for setting up SEZ is defined under SEZ Act and

State SEZ policy

Legal

Framework

State SEZ policy

SEZ ACT 2005 SEZ Rules 2006


SAMPLE

Majority of SEZs under development are less than 49 hectares in

area

SEZ Approval Status

Approval status

Area wise SEZ distribution

Source:

Up to 49

b%101-200

c%50-100 d%

201-500

e%

1000+

a%

f%

501-1000

Approval status area wise

* Area in hectares

w%Notified SEZ

Area in hectares

A u%Formal Approval

B v%In-principle approval

C

D x%Formal Approval

E y%In-principle approval

z%Notified SEZ F

Number of SEZs Total = U Total = X hectares

DefinitionSEZ Status

• Final stage after which physical development

work begins

Notified

• Given when the land has not yet been

secured but all other criteria are fulfilled

In-Principle

Approval

• Given when land is available to set up the SEZFormally

Approved

Notified SEZs

comprise a small

proportion of

SEZs


SAMPLE

i%

IT/ ITES/ Electronic Hardware

j%Pharma / Chemicals

k%Engineering

l%Multi-Product m%

Textile / Apparel n%Bio Tech

o%

Multi Servicesp%

Others

q%Multi-Product

r%

Textile / Apparels%

Multi Services

t%


Others

u%Engineering

v%FTWZ

w%Auto Related x%Electronic Product

y%

e%Pharma / Chemicalsf%

Textile / Apparel g%Multi Services

h%

Others

a%


b%

Bio Tech

c%Multi-Product

d%Engineering

IT / ITeS SEZs has the maximum number of approved SEZs due to

smaller land requirements compared to other sector

Formally approved SEZs

In-principle approved SEZs

Source:

Total = X

• IT/ITeS sector has highest formal approvals, but

covers only a% of the land area of SEZs

• Almost b-c% of IT/ITeS SEZs are operational

• IT/ITeS sector is popular in SEZs due to:

� Availability of trained manpower

� Smaller land requirement as compared to other SEZs,

which results in speedier land acquisition

� Uncertainty regarding STPI tax exemptions which are due

to expire in 20--

Overview

Notified SEZs

Total = ZTotal = Y


SAMPLE

Establishment of SEZs have boosted the international trade in

India

•Exports from special economic zones (SEZs)

rose u% during the year to end-March 2009

•It out paced India’s overall exports growth of

just v%

•Superior infrastructure in SEZ has helped

exporters cut costs and remain competitive

Exports Sector wise exports 2007- 08

Exports from SEZ

Source:

NMiscellaneous

OTotal

MNon conventional Energy

LBiotech

KLeather footwear and sports goods

JElectronics

IFood and Agro Industry

HPlastics and Rubber

GTextile and garments

FChemicals and Pharma

EEngineering

DComputer/ Electronic Software

CElectronics Hardware

BTrading and Service

AGems and Jewellery

Exports in INR bnSector

0

300

600

900

0

10

20

E

Y

2007-08

INR bn

A

U

2003-04

B

V

2004-05

C

W

2005-06

D

X

2006-07

% Share


Thank you for the attention

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