Highlights on Measures to revive investors’ interest in SEZs

special economic zone

1)A package of measures has been formulated to revive investors‟ interest in SEZs and to boost exports. The salient features of the package are:-


(i) In view of the acute difficulties in aggregating large tracts of uncultivable land for setting up SEZs, while ensuring vacancy and contiguity, we have decided to reduce the Minimum Land Area Requirement by half. For Multi-product SEZ from 1000 hectares to 500 hectares and for Sector-specific SEZ from existing 100 hectares to 50 hectares.


(ii)To provide greater flexibility in utilizing land tracts falling between 50-450 hectares, it has been decided to introduce a Graded Scale for Minimum Land Criteria which would permit a SEZ an additional sector for each contiguous 50 hectare parcel of land. This will also bring about more efficient use of the infrastructure facilities created in such an SEZ.


(iii)Further flexibility to set up additional units in a sector specific SEZ is being provided by introducing Sectoral broad-banding to


encompass   similar / related areas under the same sector.


(iv) On the issues relating to Vacancy of Land, while the existing policy allows for parcels of land with pre-existing structures not in commercial use to be considered as vacant land for the purpose of notifying an SEZ, it has now been decided that additions to such pre-existing structures and activities being undertaken after notification would be eligible for duty benefits similar to any other activity in the SEZ.


2)IT Export:

  IT  Exports  constitute  a  very  significant  part  of  India‟s  exports  and IT SEZs have a major contribution in it.

           Exports from IT SEZs during financial year     2012-13 have  
           exceeded Rs.1.40 lakh crore registering a growth of over 70% over the 
           previous year‟s exports.


Issues to boost growth of this very important sector and also to give a fillip to employment and growth in Tier-II and Tier-III cities have been specifically addressed.


(i) The present requirement of 10 hectares of minimum land area has been done away with. Now there would be no minimum land requirement for setting up an IT/ITES SEZ. Only the minimum built up area criteria would be required to be met by the SEZ developers.


(ii)The minimum built up area requirement has also been considerably relaxed with the requirement of one lakh square meters to be applicable for the 7 major cities viz: Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Kolkata. For the other Category B cities 50,000 square meters and for remaining cities only 25,000 square meters built up area norm will be applicable.


3)Transfer of ownership:

The present SEZ Framework does not include an Exit Policy for the units and feedback was that this was perceived as a great disadvantage. It has now been decided to permit transfer of ownership of SEZ units, including sale.