Page 266 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

Unit 12: Export Incentives Schemes

12.7.2 Free Trade and Warehousing Zones Notes

This scheme was formalized under the FTP 2004-09 with a view to create trade-related
infrastructure to facilitate the import and export of goods and services with freedom to carry out
trade transactions in free currency. The scheme proposes creation of world-class infrastructure
for warehousing of various products, state-of-the-art equipment, transportation and handling
facilities, commercial office-space, water, power, communications and connectivity, with one-
stop clearance of import and export formality, to support the integrated zones as ‘international
trading hubs’. These zones would be established in areas proximate to seaports, airports or dry
ports so as to offer easy access by rail and road. These zones shall be a special category of Special
Economic Zones with a focus on trading and warehousing.
The zones can be set up by public sector undertakings or by public limited companies either
independently or in collaboration with experienced infrastructure developers. The proposal
will be considered by the Board of Approvals in the Commerce Ministry. Once the proposal is
approved, the developer will be issued a letter of permission to develop, operate and maintain
the zone. 100% FDI (Foreign Direct Investment) is permitted in this regard.
The proposal must entail a minimum outlay of `100 crore for the creation and development of
the infrastructure facilities, with a minimum built up area of five lakh q.mts. The developer
shall be permitted to import duty-free such building materials and equipment as may be required
for the development and infrastructure of the zone.
The units functioning out of such zones will be extended:
(i) Income Tax Exemption as per Section 80-IA of the Income Tax Act
(ii) Exemption from Service Tax

(iii) Free foreign exchange currency transactions
(iv) Other benefits as applicable to units in Special Economic Zones

Task Prepare a comparative study between Drawback and DEPB schemes using data
available from the various reports and the Internet. Which scheme has been more successful
and why?

Caselet Press Release

PIB Press Release Wednesday, April 27, 2005
Six Free Trade and Warehousing Zones to be set up
The MMTC Limited will establish six Free Trade and Warehousing Zones in accordance
with the Foreign Trade Policy of 2004-09.
Six locations tentatively identified for Free Trade & Warehousing Zones (FTWZs) are
Kandla, Noida, Mumbai, Haldia, Kochi and Ennore, to be set up in phases. The estimated
investment for each warehouse would be `100 crore approximately. It envisages creation
of world-class infrastructure for trading and warehousing of various products.
Source: pib.nic.in

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