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

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