The central government has notified that all notified and existing Special Economic Zones (SEZs) shall be deemed to be multi-sector economic zones. This would release land parcels in single commodity SEZs for other sectors. The aim is to get more entities to set up manufacturing facilities in SEZs and to help developers to monetise their unutilised land. This amendment to the SEZ rules of 2006 ensures units from two or more sectors can start operations in any, including trading and warehousing.
 
What
  1. Besides, the minimum area required for an SEZ or Free Trade Warehousing Zone (other than for information technology, IT-enabled services, biotech or health services) has been fixed as 50 hectares; in some northern and northeastern states, 25 hectares.
  2. For IT, ITeS, biotech or health (other than hospital) services, there is no minimum area requirement for an SEZ
  3. The requirement for minimum built-up area has been brought down from 100,000 sq metres to 50,000 sq m in Category A cities, from 50,000 sq m to 25,000 sq m in Category B and from 25,000 sq m to 15,000 sq m in Category C cities.
  4. Senior officials from the state government here took the credit for the change to their continuous lobbying in this regard. The Tamil Nadu government has been raising the issue continuously with the Union ministry of commerce.
  5. Business representatives say in the 13 years since the rules were made, much has changed. Sector-specific SEZs did not have enough takers. 
  6. Besides, technology has entered many sectors, making units sector-agnostic and breaching the standard definitions at earlier sector-specific SEZs.
  7. The Government of India has given formal approval for 417 SEZs; the number of those notified is 349. Of these, the number of operational SEZs is 238. 
  8. The number of units which are approved in these SEZs is 5,168; almost two-thirds are IT SEZs. The non-IT ones had a lot of unutilised land. Total land area for the approved SEZs is 48,000 hectares.
  9. The government is no longer going to set up artificial barriers to curtail the choices for a prospective investor. There are a lot of units in China-US trade war that are looking to move out of China or starting additional factories.
  10. With this, the existing SEZs will get more units coming in, and more approved SEZs will be active, it is expected. Earlier, it required 500 hectare to get a multiproduct SEZs, now brought down to 50 ha. 
Flashback
  1. 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
  2. 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.
  3. 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. 
  4. 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.
 
 
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