Page 275 - DMGT546_INTERNATIONAL_TRADE_PROCEDURE_AND_DOCUMENTATION

International Trade Procedures and Documentation Neha Khosla, Lovely Professional University

Notes Unit 13: Special Economic Zones

CONTENTS
Objectives
Introduction
13.1 Scenario Comparison of SEZs in India and China

13.2 Special Economic Zones
13.3 Approval of New Units
13.4 Present Debate on SEZ

13.5 Summary
13.6 Keywords
13.7 Review Questions
13.8 Further Readings

Objectives

After studying this unit, you will be able to:
Explain Special economic zones
Discuss the Procedure for setting up SEZ
Describe Approval of new units
Discuss the Present debate on SEZ

Introduction

Realizing and anticipating that export are vital to the country’s economic success, India was
one of the first Asian countries to recognize the significance and effectiveness of the Export
Processing Zone (EPZ) model in promoting exports from the country, which resulted in setting
up of the first EPZ in Asia at Kandla (Gujarat) in 1965. India subsequently extended its policy
of Export Processing Zones to other places in the country for the purposes of tapping its innate
skills of manpower, natural resources and for accumulating foreign reserves through exports
for the larger development of the country. EPZs in India have played a great role in export
expansion, though not comparable to China. India’s exports through EPZs increased from ` 10
lakh in 1965 to $1 billion in the late nineties. On the other hand, Shenzhen SEZ1 alone has
attracted an investment of $38 billion and is now the backbone of China’s export success in the
international market. Taking note of the success of SEZs in other countries, particularly in
China, the Government of India realized the need to overcome the shortcomings that our
EPZs have been experiencing on account of the multiplicity of controls and clearances; absence
of world-class infrastructure, high transaction cost and an unstable fiscal regime. The
Government of India decided to replicate the Chinese success story in India with model
changes in its the Special Economic Zones (SEZs) Policy, which was announced in April 2000
for the purposes of promotion of export, providing world-class infrastructure, reducing
transaction cost of export-oriented firms resulting in low cost of Indian product in international
market, making India a global centre of manufacturing, trading and services and attracting
larger foreign investments in India.

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