{"id":50502,"date":"2025-06-16T14:52:16","date_gmt":"2025-06-16T09:22:16","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=50502"},"modified":"2025-06-16T16:16:18","modified_gmt":"2025-06-16T10:46:18","slug":"special-economic-zones-sezs","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/special-economic-zones-sezs\/","title":{"rendered":"Special Economic Zones (SEZs)"},"content":{"rendered":"<h2><strong>Special Economic Zones Latest News<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The government recently relaxed key rules related to Special Economic Zones (SEZs) to further encourage the domestic manufacture of semiconductors and electronics.<\/span><\/p>\n<h2><strong>About Special Economic Zones\u00a0<\/strong><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SEZs are <\/span><b>special areas<\/b><span style=\"font-weight: 400;\"> within a country that <\/span><b>offer incentives to business and trade <\/b><span style=\"font-weight: 400;\">regulations operating in those areas.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SEZs typically offer <\/span><b>competitive infrastructure, duty-free exports, tax incentives<\/b><span style=\"font-weight: 400;\">, and other measures designed to make it easier to conduct business.<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The main <\/span><b>objectives <\/b><span style=\"font-weight: 400;\">of the SEZ are <\/span><b>generating <\/b><span style=\"font-weight: 400;\">additional <\/span><b>economic activity, promoting<\/b> <b>exports <\/b><span style=\"font-weight: 400;\">of goods and services from the country, <\/span><b>promoting foreign and domestic investment, <\/b><span style=\"font-weight: 400;\">and <\/span><b>creating more employment <\/b><span style=\"font-weight: 400;\">opportunities besides the <\/span><b>development of infrastructure<\/b><span style=\"font-weight: 400;\"> facilities.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The category \u2018SEZ\u2019 c<\/span><b>overs a broad range<\/b><span style=\"font-weight: 400;\"> of zone types, few of which are <\/span><b>free zones (FZs), industrial estates (IEs),<\/b> <b>free ports,<\/b> <b>free trade zones (FTZs), and <\/b><span style=\"font-weight: 400;\">e<\/span><b>xport processing zones (EPZs).\u00a0<\/b><\/li>\n<\/ul>\n<h2><strong>SEZs in India<\/strong><\/h2>\n<ul>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><b>Asia\u2019s first EPZ <\/b><span style=\"font-weight: 400;\">was set up in <\/span><b>Kandla, Gujarat, in 1965,<\/b><span style=\"font-weight: 400;\"> followed by seven more EPZs in the country.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>SEZ policy<\/b><span style=\"font-weight: 400;\"> was introduced in <\/span><b>April 2000, <\/b><span style=\"font-weight: 400;\">and it is envisioned to make SEZs a driver for economic growth supported by quality infrastructure and accompanied by an attractive incentives package, at the centre and state levels in the country.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The <\/span><b>eight pre-existing EPZs<\/b><span style=\"font-weight: 400;\"> located at Kandla and Surat (Gujarat), Mumbai (Maharashtra), Cochin (Kerala), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal), and Noida (Uttar Pradesh) were <\/span><b>converted into SEZs under this scheme.\u00a0<\/b><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Later, the <\/span><b>SEZ Act, 2005<\/b><span style=\"font-weight: 400;\"> was passed by the Indian Parliament in May 2005, and the act, <\/span><b>supported by SEZ Rules<\/b><span style=\"font-weight: 400;\">, came into effect on February 10, <\/span><b>2006<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400; text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">As of March 31, 2024, there are 280 operational SEZs in India.<\/span><\/li>\n<\/ul>\n<h2><strong>Rules Pertaining to SEZs in India<\/strong><\/h2>\n<ul>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">A designated <\/span><b>duty-free enclave<\/b><span style=\"font-weight: 400;\"> is <\/span><b>considered as a territory outside the customs jurisdiction of India for authorized operations within <\/b><span style=\"font-weight: 400;\">the Special Economic Zone (<\/span><b>SEZ).<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Duty free import and domestic procurement of goods<\/b><span style=\"font-weight: 400;\"> for the development, operation, and maintenance of your company\/SEZ unit.<\/span><\/li>\n<li style=\"text-align: justify;\"><b>No import license is necessary,<\/b><span style=\"font-weight: 400;\"> and both <\/span><b>manufacturing and service activities are permitted.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\"><b>100 percent income tax exemption on export income<\/b><span style=\"font-weight: 400;\"> for SEZ units under Section 10AA of the Income Tax Act for the<\/span><b> first five years,<\/b> <b>50 percent for the next five years thereafter <\/b><span style=\"font-weight: 400;\">and <\/span><b>50 percent of the ploughed back export profit for the next five years.<\/b><\/li>\n<li style=\"text-align: justify;\"><b>Exemption from the Goods and Service Tax (GST)<\/b><span style=\"font-weight: 400;\"> and <\/span><b>levies imposed by the state government<\/b><span style=\"font-weight: 400;\"> (<\/span><b>supplies to SEZs are zero rated under the IGST Act,<\/b><span style=\"font-weight: 400;\"> 2017, meaning they are not taxed).<\/span><\/li>\n<li style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Units within the SEZ <\/span><b>must demonstrate Positive Net Foreign Exchange over<\/b><span style=\"font-weight: 400;\"> a cumulative <\/span><b>period of five years <\/b><span style=\"font-weight: 400;\">from the start of production.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\"><b>Domestic sales <\/b><span style=\"font-weight: 400;\">are <\/span><b>subject to full customs duty<\/b><span style=\"font-weight: 400;\"> and adhere to the current import policy.\u00a0<\/span><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><b>Minimum Alternate Tax (MAT) must be paid by SEZ units.<\/b><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">S<\/span><b>ingle window clearances <\/b><span style=\"font-weight: 400;\">for all state and federal government approvals.<\/span><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">SEZ units have the <\/span><b>liberty to engage in subcontracting.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><b>Routine inspections of export\/import cargo<\/b><span style=\"font-weight: 400;\"> by customs authorities are <\/span><b>not required.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><b>SEZ Developers\/Co-Developers and Units<\/b><span style=\"font-weight: 400;\"> are entitled to <\/span><b>direct and indirect tax benefits<\/b><span style=\"font-weight: 400;\"> as stipulated in the SEZs Act of 2005.<\/span><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">On June 9, <\/span><b>2025<\/b><span style=\"font-weight: 400;\">, India announced a series of <\/span><b>regulatory amendments <\/b><span style=\"font-weight: 400;\">aimed at promoting SEZs focused on <\/span><b>semiconductor and electronic component manufacturing.<\/b>\n<ul>\n<li style=\"text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">One of the major revisions is the amendment to Rule 5 of SEZ Rules, 2006, which <\/span><b>reduces the minimum land requirement for SEZs<\/b> <b>dedicated <\/b><span style=\"font-weight: 400;\">exclusively <\/span><b>to semiconductors or electronic components from 50 hectares to 10 hectares.\u00a0<\/b><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Additionally, Rule 18 has been amended to <\/span><b>allow these SEZ units to sell their products in the domestic market,<\/b><span style=\"font-weight: 400;\"> subject to payment of applicable duties. <\/span><\/li>\n<li style=\"text-align: justify;\" aria-level=\"1\">Further, an amendment to Rule 7 empowers the <b style=\"font-size: inherit;\">SEZ Board of Approval to waive the requirement for land to be encumbrance-free in specific cases. <\/b><span style=\"font-weight: 400;\">This provision <\/span><b style=\"font-size: inherit;\">applies when the land is mortgaged or leased<\/b><span style=\"font-weight: 400;\"> to <\/span><b style=\"font-size: inherit;\">central or state governments or their authorized agencies,<\/b><span style=\"font-weight: 400;\"> offering greater flexibility in land acquisition and development.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><b>Source:<\/b><span style=\"font-weight: 400;\">\u00a0<\/span><a href=\"https:\/\/www.thehindu.com\/business\/Industry\/why-have-special-economic-zones-rules-been-relaxed-explained\/article69698704.ece\" target=\"_blank\" rel=\"nofollow noopener\"><span style=\"font-weight: 400;\">TH<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Special Economic Zones (SEZs) are designated areas offering tax breaks, relaxed regulations, and incentives to boost trade, investment, and economic growth.  Read more about Special Economic Zones (SEZs), Introduction, Rules, SEZs Act, News<\/p>\n","protected":false},"author":23,"featured_media":50434,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[21,866,22,23],"class_list":{"0":"post-50502","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-prelims-current-affairs","8":"tag-prelims-pointers","9":"tag-special-economic-zones","10":"tag-upsc-current-affairs","11":"tag-upsc-prelims-current-affairs","12":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/50502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=50502"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/50502\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/50434"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=50502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=50502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=50502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}