Special Economic Zones (SEZ) Scheme

Special Economic Zones Act, 2005, was passed by Parliament in May, 2005. The act envisages that the SEZs would attract a large flow of foreign and domestic investment in infrastructure and productive capacity leading to generation of additional economic activity and creation of employment opportunities.

• As per the “Special Economic Zones Rules, 2006”, notified by the Department of Commerce, in case a SEZ is proposed to be set up exclusively for electronics hardware and software, including information technology enabled services, the area shall be ten hectares or more with a minimum built up processing area of one lakh square meters.
• A SEZ is a designated duty free enclave to be treated as foreign territory for the purpose of trade operations and duties and tariffs.
• Recently, Minimum Land Area requirement for setting up of new SEZs has been reduced to 50% for Multi-product and Sector-specific SEZs and also a new sector ‘agro-based food processing’ has been introduced to encourage agro-based industries in SEZs.