Indian Special Economic Zones or SEZs are now in the process of getting established. A few SEZs have established the required infrastructure and systems and are operational. There are several more that have put in their applications seeking government approval and are in the process of outlining their plans for setting up large SEZs that will become operational in the next few years.
Special Economic zones in India are based on Chinese Successes with SEZs and the United States Foreign Trade Zones (FTZs) which are now finally set to take off after the government has freed a lot of licensing restrictions and eased the tariffs and incentives with the new SEZ Act, 2005. Over 150 SEZ proposals have now been cleared by the Indian government with the promise of several more.
India is looking to these SEZs to power its investment and growth and help boost employment, manufacturing and services. The main objectives of these zones include; development of the advanced technology sector, in particular information technology and telecom networks, material engineering, health care, medical engineering, genetic engineering, biotechnology and environmental protection.
Ensuring favorable economic, organizational and infrastructural conditions for domestic and foreign investors employment of the scientific and research potential of local universities by the transfer of the results of scientific research and advanced technologies to the industrial sector as well as education and training of professional staff supporting the development and restructuring of the existing companies by the delivery of innovative technologies and organizational concepts.
SEZs have come with a large range of incentives from the government that includes very low tariffs and barriers, exemption from taxation and the freedom to operate the business on globally accepted business principles with minimum application of Indian laws and regulatory procedures. Indian SEZs also allow global business and individuals to buy property including real estate and setup operations including deputation of foreign nationals within the SEZs with very minimal procedures and regulations.
The SEZs will attract large foreign investment, enable the setting up of large manufacturing and service operations in India, expand on the infrastructure and competitiveness of India, help improve the employment potential in India for its citizens, grow the exports and trade revenues from India substantially and bring in a global business climate into India that will make it more competitive and global in its outlook and operation.
SEZs in India are being promoted and managed by the Central Government and the individual State Governments, almost all of who have established separate cells within their respective Ministries of Finance and Commerce. Indian SEZs are however being established and operated by a mix of public sector undertakings that are owned and controlled by the Central or State governments and private enterprises on their own, as consortiums or in partnership with government owned enterprises.
Today only a few SEZs are operational and available for investment and establishing of manufacturing and service operations.
Most expect to start becoming destinations between 2007-2009. Global business that is interested in India might well begin their process of search and evaluation of potential SEZs that suit their requirements.
This early research will enable a better selection of the SEZ and a lead time of two-three years for the actual establishment and launch of operations out of India.
Source : India Real Estate blog
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