Special Economic Zone (SEZ)

A special economic zone (SEZ) is a neighborhood during which the business and trade laws are different from the remainder of the country. 

SEZs are located within a country's national borders, and their aims include increased balance of trade, employment, increased investment, job creation and effective administration. To encourage businesses to line up within the zone, financial policies are introduced. 

Special Economic Zone (SEZ)

These policies encompass on investing, taxation, trading, quotas, customs and labour regulations. Additionally, companies could also be offered tax holidays, where upon establishing themselves during a zone, they're granted a period of lower taxation.

The creation of special economic zones by the host country could also be motivated by the will to draw in foreign direct investment (FDI).The advantages a corporation gains by being during a special economic zone may mean that it can produce and commodity at a lower cost, aimed toward being globally competitive. In some countries, the zones are criticized for being little quite labor camps, with workers denied fundamental labour rights.

Types of Special Economic Zone (SEZ):-

The special economic zone can include:

• Free-trade zones (FTZ)
• Export processing zones (EPZ)
• Free ports
• Bonded logistics parks (BLP)
• Urban enterprise zones
• Free zones/ Free economic zones (FZ/ FEZ)
• Industrial parks/ industrial estates (IE)

With a view to creating an environment for achieving rapid growth in exports and to provide an internationally competitive and hassle-free environment for boosting exports, a Special Economic Zone policy was announced in the EXIM Policy 2000.

The Salient features of SEZ Policy are:-

ü  A designed duty free enclave to be treated as foreign territory only for trade operations and duties and tariffs.

ü  No license required for import.

ü  Manufacturing, trading and service activities allowed.

ü  SEZ units to be positive net foreign exchange earners within three years.

ü  Full freedom for sub-contracting.

ü  Domestic sales subject to full customs duty and import policy in force.

ü  No routine examination by customs authorities of export or import cargo.