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Guide To Sez India Sample


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  • 1. Guide to SEZ - India June 2009
  • 2. Executive Summary SEZ policy introduced in 20--; SEZ bill passed in 20-- Three types of SEZs present in India – Sector - specific, Multi–product and SEZ in a port/airport SEZ area comprises of - Processing Area and Non Processing Area Introduction – Minimum area requirement for setting up SEZs varies from a -b hectares There are four different types of SEZ development models - Industrial Parks, Fully Integrated , Outsourced Facility and Shared Infrastructure LE – Fully integrated model is popular in India P Government provide various incentives to promote SEZs. Developers and unit can avail various tax benefits like exemption from Income tax, customs duty, distribution tax M Incentives & SEZs in India are governed by an administrative set up consisting of Board of Approval, A Establishment Development Commissioner, SEZ Authority and Approval Committee S Procedure The developer of SEZ and the unit are required to follow certain norms like: – Conformance to all environmental rules ; Positive net foreign exchange requirement for units; Minimum requirement of a% stake for developers There are 3 stages in approval of SEZ- In-principle approval, Formal approval and Notified SEZs SEZ Scenario – Notified SEZs comprise a small proportion of total SEZs India IT / ITeS sector leads with highest number of formal approvals Southern and Western states lead in SEZ development SEZs accounted for over b% share in India’s exports in 20- - --; c% y-o-y growth in SEZ exports Performance of Gems and Jewelry sector was leading sector in SEZ exports SEZs Employment in SEZs grew at a rate of d % annually Investments in SEZ witnessed a growth of e% per annum GUIDE TO SEZ – INDIA . PPT 2
  • 3. • Introduction • Establishment Procedure • Incentives • SEZ Scenario – India • Performance of SEZs • Upcoming SEZs • Appendix GUIDE TO SEZ – INDIA . PPT 3
  • 4. SEZs can be categorized on basis of sector, function or location and required to have processing as well as non-processing area Types of SEZ Sector – Specific SEZ Multi – Product SEZ SEZ in a port or airport • Manufacture multiple goods in one • Manufacture one or more goods in a • SEZ in an existing port or airport for sector or across multiple sectors particular sector manufacture of goods falling in two or LE – Trading and warehousing • Render one or more services in a more sectors or for trading and – Render two or more services in a particular sector warehousing or rendering of services P sector or multiple sectors Processing Area SAM SEZ Layout Non - Processing Area • Non-processing area is intended to provide • Processing area is the demarcated area in SEZ support facilities to SEZ processing area and where units can be located for manufacture of may include: goods or rendering of services Educational institutions • Minimum processing area has been uniformly Hospitals fixed at Hotels x% for Multiproduct SEZs Recreation and entertainment facilities y% for product specific SEZs Residential and business complexes Source: GUIDE TO SEZ – INDIA . PPT 4
  • 5. Legal framework for setting up SEZ is defined under SEZ Act and State SEZ policy State SEZ policy Legal Framework SEZ ACT 2005 SEZ Rules 2006 GUIDE TO SEZ – INDIA . PPT 5
  • 6. Majority of SEZs under development are less than 49 hectares in area SEZ Approval Status Area wise SEZ distribution SEZ Status Definition 1000+ 501-1000 Formally • Given when land is available to set up the SEZ 201-500 f% Approved 50-100 d% e% c% In-Principle • Given when the land has not yet been LE Approval secured but all other criteria are fulfilled Notified • Final stage after which physical development 101-200 b% work begins MP a% Up to 49 Approval status Number of SEZs SA Total = U * Area in hectares Approval status area wise Total = X hectares Area in hectares Formal Approval D x% Formal Approval A u% In-principle approval E y% Notified SEZs In-principle approval B v% comprise a small Notified SEZ F z% proportion of SEZs Notified SEZ C w% Source: GUIDE TO SEZ – INDIA . PPT 6
  • 7. IT / ITeS SEZs has the maximum number of approved SEZs due to smaller land requirements compared to other sector Overview Formally approved SEZs • IT/ITeS sector has highest formal approvals, but Others Total = X covers only a% of the land area of SEZs h% • Almost b-c% of IT/ITeS SEZs are operational Multi Services • IT/ITeS sector is popular in SEZs due to: Textile / Apparel g% Availability of trained manpower Pharma / Chemicals e% f% LE Smaller land requirement as compared to other SEZs, Engineering d% which results in speedier land acquisition c% a% to expire in 20-- MP Uncertainty regarding STPI tax exemptions which are due Multi-Product b% Bio Tech Notified SEZs Multi Services Bio Tech Others p% SA Total = Y IT/ ITES/ Electronic Hardware In-principle approved SEZs Others y% Total = Z Textile / Apparel n% Multi-Product o% Electronic Product q% Multi-Product l% m% Auto Related w% x% Engineering k% FTWZ v% j% u% Pharma / Chemicals i% Engineering t% r% s% IT/ ITES/ Electronic Hardware Textile / Apparel Multi Services IT/ ITES/ Electronic Hardware Source: GUIDE TO SEZ – INDIA . PPT 7
  • 8. Establishment of SEZs have boosted the international trade in India Exports Sector wise exports 2007- 08 •Exports from special economic zones (SEZs) rose u% during the year to end-March 2009 Sector Exports in INR bn Gems and Jewellery A •It out paced India’s overall exports growth of just v% Trading and Service B LE Electronics Hardware C •Superior infrastructure in SEZ has helped exporters cut costs and remain competitive Computer/ Electronic Software D MP Engineering Chemicals and Pharma E F A Exports from SEZ Textile and garments G INR bn 900 600 S % Share 20 Plastics and Rubber Food and Agro Industry Electronics H I J Y Leather footwear and sports goods K 10 W X E Biotech L 300 U V D Non conventional Energy M A B C 0 0 Miscellaneous N 2003-04 2004-05 2005-06 2006-07 2007-08 Total O Source: GUIDE TO SEZ – INDIA . PPT 8
  • 9. Thank you for the attention The Guide to SEZ – India report is a special feature from Netscribes. For more detailed information or customized research requirements please contact: Natasha Mehta, CFA Gagan Uppal Phone: +65 9651 6382 Phone: +91 98364 71499 E-Mail: E-Mail: About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. This report is published for general information only. Although high standards have been used in preparing this report, Netscribes (India) Private Ltd. or Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Private Ltd. and no part may be reproduced without prior written permission. GUIDE TO SEZ – INDIA . PPT 9