A special economic zone (SEZ) is a region within a country which is governed by economic laws that are more liberal than in the rest of the country, created with the purpose of attracting foreign investment.

India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965.

It was early 2000 when the then Union Commerce and Industry Minister, the late Murasoli Maran, went on a trip to China to get first-hand experience of the special economic zones. This led to his announcement of SEZs in India through the annual Export-Import (Exim) Policy of March 2000. It is now almost six years since the concept has been part of economic policy. The country not only has greenfield SEZs, but also the erstwhile export processing zones (EPZs) converted into SEZs.

Major objectives of the SEZ Act include generation of additional economic activity, promotion of export of goods and services, investment from domestic and foreign sources and creation of employment opportunities. This Act is unique as it helps in backward and forward integration of the economy.

This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. SEZs in India functioned from 1.11.2000 to 09.02.2006 under the provisions of the Foreign Trade Policy and fiscal incentives were made effective through the provisions of relevant statutes

At present,
1016 units are in operation in the SEZs, providing direct employment to over 1.79 lakh persons; about 40% of whom are women. Private investment by entrepreneurs in the SEZs established prior to the SEZ Act is of the order of over Rs. 4400 crore. In the 63 notified SEZs which have come up after 10th February 06, investment of Rs. 13,435 crores has already been made in less than one year. These SEZs have so far provided direct employment to 18,457 persons.

Impact of the scheme
The overwhelming response to the SEZ scheme is evident from the flow of investment and creation of additional employment in the country. The SEZ scheme has generated tremendous response amongst the investors, both in India and abroad, which is evident from the list of Developers who have set up SEZs:

    Nokia SEZ in Tamil Nadu
    Quark City SEZ in Chandigarh
    Flextronics SEZ in Tamil Nadu
    Mahindra World City in Tamil Nadu
    Motorola, DELL and Foxconn
    Apache SEZ (Adidas Group) in Andhra Pradesh
    Divvy's Laboratories, Andhra Pradesh
    Rajiv Gandhi Technology Park, Chandigarh
    ETL Infrastructure IT SEZ, Chennai
    Hyderabad Gems Limited, Hyderabad


    Expected investment and employment from SEZs (by December 2009):
    By the 63 notified Special Economic Zones:


      Investment: Rs. 53561 crores
      Employment: 15,75,452 additional jobs
      If 234 formal approvals becomes operational:
      Investment: Rs. 3,00,000 crores
      Employment: Rs. 4 million additional jobs
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  • Special Economic Zones At a Glance

    No. of valid formal approvals: 234
    No. of notified SEZs: 63
    No. of formal approvals pending notification: 171
    No. of in-principle approvals: 162

    Land requirement:

    # SEZs notified 67 sq km
    # SEZs formally approved 350 sq km
    # In-principle approvals 1400 sq km
    # Total area for proposed SEZs (FA+IP) - 1750 sq km

    Investment made in 63 notified SEZs Rs 13,435 crore

    Employment created in 63 notified SEZs 18,457 people

    Expected investment and employment from SEZs (by December 2009)

    By the 63 notified SEZs:
    # Investment Rs 53,561 crore
    # Employment 15,75,452

    If 234 formal approvals become operational
    # Investment Rs 3,00,000 crore
    # Employment 4 million additional jobs


    Source:Government of India
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