Designated areas in countries that possess special economic regulations that are different from other areas in the same country is called Special Economic Zone. Moreover, these regulations tend to contain measures

that are conducive to foreign direct investment. Conducting business in a SEZ usually means that a company will receive tax incentives and the opportunity to pay lower tariffs.

While many countries have set up special economic zones, China has been the most successful in using SEZ to attract foreign capital. In fact, China has even declared an entire province (Hainan) to be an SEZ, which is quite distinct, as most SEZs are cities.

Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone.

The category SEZ includes free trade zones (FTZ), export processing Zones (EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports, free economic zones, and urban enterprise zones.

Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC), development of infrastructure and to increase the employment.

The Special Economic Zones (SEZs) scheme has been a key instrument for promoting exports from India. Today, 389 SEZs have been notified of which 170 are functional and they employ over one million persons. India has received investment of over Rs.

2.36 lakh crores in SEZs and exports from SEZs have seen a dramatic jump from Rs. 22,840

crores in 2005-06 to Rs. 4.76 lakh crores in 2012-13, a growth of over 2000% over the 7 year period. Exports from SEZs during the current financial year have registered a growth of over 31% over the previous year. Undoubtedly, these are significant achievements, but the SEZ scheme has not been able to realize its full potential so far. Government has undertaken a comprehensive review of the SEZ Policy after intense stakeholder consultation and after a year- long process,now a package of reforms for reviving investor interest in SEZs is being announced.


      Noticing the fact that there are acute difficulties in aggregating large tracts of uncultivable land which is vacant and contiguous and it has been decided to reduce the Minimum Land Area Requirement by half for different categories of SEZs. For Multi—product SEZ, this has been brought down from 1000 hectares to 500 hectares and for Sector-Specific SEZs, it has been brought down to 50 hectares from the existing 100 hectares.


           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.

 Further flexibility to set up additional units in a sector specific SEZ has been   

provided by introducing Sectoral Broad-Banding to encompass similar or related areas under the same sector.
         While existing policy allows for parcels of land with pre-existing structures not in commercial use to be considered as vacant land of SEZ, it has now been decided that additions to such pre-existing structures and activities being undertaken after the notification would be eligible for duty benefits similar to any other activity in SEZ.

  IT exports constitute a significant part of India’s exports and IT SEZs have made a significant contribution in this direction. We have decided that there would be no minimum land requirement for setting up IT/ITES SEZs and only minimum built up area criteria would be needed to be met by SEZ Developers. Minimum built up area requirements have also been considerably relaxed with the requirement of one lakh square meters to be applicable for 7 major cities  Mumbai, Delhi (NCR), Chennai, Hyderabad,Bangaluru, Pune and Kolkata. For the other class B-cities minimum built up area would be 50,000 sq. mtrs while for other cities 25,000 sq. mtrs built up area norm will be applicable. I am confident that these measures will give a boost to IT SEZs in Tier-II and III cities, creating employment and growth.

 Receiving feedback from SEZ units now it has also been  decided to allow transfer of ownership of SEZ units including sale .