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The government of India has introduced policy on 1.4.2000 for setting up Special Economic Zone (SEZ) with a view to facilitate Indian Industry an internationally competitive and hassle free environment for exports. SEZ can be used to set up manufacturing operations and rendering of services. SEZ is a specifically defined duty free zone and is deemed to be a foreign territory for the purpose of trade operations and Government duties etc. Today India has 811 units in operation in the 8 functional SEZs. There were some blocks in the smooth implementation of the policy therefore to overcome these roadblocks and to give a long term and stable policy framework with minimum rules and regulations, the SEZ Act, 2005 has been promulgated. The provisions of the Act regulate the legal framework and regulatory aspects of SEZ development as well as for enterprises operating in SEZs.

The Act does not provide any exemptions to the Developer or the units from any labour Law Legislations as was desired by the industry.

Special Economic Zone is one or more areas of a country where the tariffs and quotas are eliminated and bureaucratic requirements are lowered so that more companies are attracted to the area. The companies establishing in the area also gets extra incentives for doing business. The policy offered setting up of SEZ in the public, private, joint sector or by State Governments. The following are the list of SEZ in India. Out of these, Noida (Uttar Pradesh), Falta (West Bengal), Chennai (Tamil Nadu) and Vishakapatnam (Andhra Pradesh) SEZ were Export Processing Zone (EPZ) before April 1, 2003.

  1. SEEPZ Special Economic Zone

  2. Kandla Special Economic Zone

  3. Cochin Special Economic Zone

  4. Madras Special Economic Zone

  5. Visakhapatnam Special Economic Zone

  6. Falta Special Economic Zone

  7. Noida Special Economic Zone

  8. Surat Special Economic Zone

In addition 18 approvals have been given for setting up of SEZ at Positra (Gujarat), Navi Mumbai and Kopata (Maharashtra), Nanguneri (Tamil Nadu), Kulpi and Salt Lake (West Bengal), Paradeep and Gopalpur (Orissa), Bhadohi, Kanpur, Moradabad and Greater Noida (U.P.), Kakinada (Andhra Pradesh), Vallarpadam/Puthuvypeen (Kerala) Hassan ( Karnataka), Jaipur and Jodhpur ( Rajasthan) on the basis of proposals received from the State Governments.

The word Special in its name denotes the following:

  • Special policies and flexible measures

  • Special tax incentives foreign investments

  • Greater independence

  • Special Economic Management Systems

  • Listed separately in the National Planning


Overview of SEZ Act, 2005 and SEZ Rules, 2006

Objectives and Features of SEZ

Terms and conditions an SEZ unit has to comply with

Incentives and facilities offered to SEZ Units

Approval of new units

Obligation of the unit under the scheme

Developing SEZ

Facilities for domestic suppliers to SEZ


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