To Revive Interest in SEZs of Investors Government announced Changes in FTP

The Annual Supplement 2013-14 to Foreign Trade Policy (FTP) 2009-14 was announced on 18 April 2013 by the Union Minister for Commerce, Industry and Textiles, Anand Sharma at Vigyan Bhawan, New Delhi.

In the latest Annual Supplement 2013-14 the Union Government has tried to implement measures to revive the interest of the investors in Social Economic Zones (SEZs) as well as to boost exports.

Important features of the Package are

• The Government has reduced the size of total land area required for development of SEZs to its half from its initial requirement of minimum Land Area of 100 hectares for allowing the development of SEZs. Now an investor needs to have 50 hectares of land to develop a SEZ. This has been done in response to end the difficulties being faced by the investors in gaining collective large area of uncultivable land for setting up of the SEZ.
• Graded Scale for Minimum Land Criteria has been introduced to permit the SEZ an additional sector for each contiguous 50 hectare parcel of land. This has been done to ensure flexibility in utilization of the land tracts that falls between the 50 to 450 hectares.
• Flexibility is granted for setting-up additional units in a sector specific SEZ. This will be done by introducing sectoral broad-banding to encompass similar/related areas under the same sector.
• In context of Vacancy of Land: the government has revised the policy in existence that allowed a parcel of land with pre-existing structures but not in commercial use to be considered as a vacant land and this was used with the purpose of notifying it for a SEZ. The new policy being introduced is that pre-existing structures and activities being undertaken after notification would be eligible for duty benefits similar to any other activity in the SEZ.

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 1.40 lakh crore rupees and it registered a growth of over 70 percent, over the previous year’s exports. The Government has brought in new changes to boost growth in the IT SEZ sector and to encourage the employment opportunities in Tier-II and Tier-III cities.

Changes Implemented in IT Exports
• For development of IT SEZs, the Government has done away the criterion on minimum land area of 10 hectares, making it to no minimum land requirement for setting up an IT/ITES SEZ. The SEZ developers will have to meet up with the minimum built in area requirement.
• The criteria of requiring a minimum build-up land area has also been relaxed to a greater extent. The requirement of one lakh square meters is applicable in 7 major cities namely Mumbai, Delhi (NCR), Chennai, Hyderabad, Bangalore, Pune and Kolkata. For the other Category B cities 50000 square meters and for remaining cities only 25000 square meters built up area norm will be applicable.

The SEZ policy Framework in existence at present doesn’t include a policy of exit but now the Government permits, the transfer of ownership of SEZ units, including sale.

The Government has also introduced several schemes and modified different policies as per the requirements.