(For latest Export promotion initiatives see Economic Survey-volume 2-chapter 4)

Various Zones

The units undertaking to export their entire production of goods may be set up at Export Processing Zones (EPZs), Electronic Hardware Technology Commerce Park (EHTP), Software Technology Park (STP), Agri export zones (AEZ), special economic zones (SEZs)and Export Oriented Units (EOUs). EPZs are special enclaves, separated from the Domestic Tariff Area (DTA) by fiscal barriers and are intended to provide an internationally competitive duty free environment for export production at low cost.

Export Promotion Industrial Parks

Centrally sponsored ‘Export Promotion Industrial Parks’ (EPIP) scheme was introduced in August 1994 with the objective to involve the state governments in creation of infrastructural facilities for export-oriented production. It provides for 75 per cent of capital expenditure towards creation of infrastructural facilities limited to Rs 10 crore of grant to the State government. So far 19 proposals for establishment of EPIPs have been sanctioned.

Export Processing Zones/Export oriented Units

India has seven Export Processing Zones (EPZs) at Kandla (Gujarat), Santacruz (Maharashtra), Cochin (Kerala), Chennai (Tamil Nadu), Noida (U.P.), Falta (West Bengal) and Visakhapatnam (A.P.). Each zone provides basic infrastructural facilities in addition to a whole range of fiscal incentives. Customs clearance facilities are offered within the zone. Government has recently permitted development of EPZs by the private, state or joint sectors. The inter-ministerial committee on private EPZs has already cleared the proposals for private EPZs to be set up in Mumbai, Surat, Tirunelveli and Kancheepuram and at Greater Noida by the Government of Uttar Pradesh. The scheme of Export Oriented Units (EOUs) introduced in early 1981 is complementary to the EPZ Scheme. It adopts the same production regime but offers a wider option in locations with reference to factors like source of raw materials, ports of exports, hinterland facilities, availability of technological skills, existence of an industrial base and the need for a larger area of land for the project.

In order to encourage exports, the Government of India offers special incentives to investors to set up units to manufacture goods for exports. Such units may be set up in Export Processing Zones (EPZs) or may be Export Oriented Units (EOUs) outside EPZs. 100 per cent foreign equity is welcome in EOUs and EPZs.

The EPZs are designed to provide an internationally competitive duty free environment at low cost for export production.

Additional incentives are offered to units engaged in the field of electronics and software which can be set up under the Electronic Hardware Technology Park or Software Technology Park programmes.                              

Agri-export zone scheme

The concept of the agri-export zone was introduced in the Exim Policy in March 2002. The aim of the AEZ is to take a comprehensive look at a particular product located in a contiguous area for the purpose of developing and sourcing the raw materials, their processing and packaging, leading to final exports. Thus, the entire effort is centered around a cluster approach of identifying the potential products, the geographical region in which these are grown and adopting an end to end approach of integrating the entire process from production to market.

Few AEZs already sanctioned include those for pineapple in West Bengal, litchi in Uttaranchal, gherkins in Karnataka, vegetables in Punjab, mangoes and potatoes in Uttar Pradesh, grapes and wines in Maharashtra, flowers in Tamil Nadu and potatoes in Punjab.

SPECIAL ECONOMIC ZONES

These zones are the areas where export production takes place free from all rules and regulations governing imports and exports in order to give them operational flexibility. The most important for the success of SEZs is comprehensive urban infrastructure facilities for industrial and residential use, medical and healthcare facilities, captive ancillary infrastructure like water and power, education facilities, recreation facilities, safety and security, transport infrastructure, tourism and entertainment of international standard. It is an accepted fact that the EPZs and FTZs (Free trade zones) have not produced the desired and excepted results in increasing the share of Indian trade in international markets. One of the reasons why they failed was of course due to the lack of integrated infrastructure facilities within the zones.

Number of SEZs are being set up at Paradeep in Orissa, Kakinada in Andhra Pradesh, Kulpi in West Bengal, Dronagiri at Navi Mumbai in Maharashtra, Positra, near Jamnagar in Gujarat and Nanguneri in TamilNadu. While these Greenfield projects will take some time to takeoff, four existing export-processing zones at Kandla, Kochi, Vizag and Mumbai have, meanwhile, been converted into SEZs.

Central Government has framed a scheme for approval of plans to develop, operate and maintain Special Economic Zones (SEZs) for the period from 1 April 2001 to 31 March 2006. The features of the scheme are:

• SEZs can be developed and managed entirely in the private sector or jointly with the State Government.
• Investors, for privately developed zones, can comprise Indian individuals, non-resident Indians, domestic and foreign companies.
• Certain conditions have been prescribed for grant of approval for setting up of SEZs. This scheme requires that the minimum size of the SEZ should be at least 1,000 hectares and its main objective should be the development of integrated world-class infrastructure for exports.
• The Scheme also lays down a detailed procedure for seeking approval for setting up units in SEZs.

In the early 1990s, the Raunaq Singh Committee had examined the possibility of setting up free ports in India as an alternative to Free trade zones in Singapore and Dubai. Later, the Indian Institute of Foreign Trade evolved an implementation model for free ports in India.

Coastal economic zones

The Union Cabinet in 2016 had approved setting up of 14 mega CEZs under National Perspective Plan of SagarmalaProgramme. Its aim was to promote development of industrial clusters around ports, encourage port led development, reduce logistics cost and time for movement of cargo, enhance global competitiveness of country’s manufacturing sector and create hubs of job creation.

CEZs are spatial economic regions comprising group of coastal districts or districts with strong linkage to ports in region to tap into synergies with planned industrial corridor projects. These zones are expected to provide business-friendly ecosystem including ease of doing business, ease of exporting and importing, swift decisions on applications for environmental clearances and speedy water and electricity connections.

CEZ will be developed as part of plan for developing 14 such industrial clusters to spur manufacturing and generate jobs. The plan envisages total investment of Rs 15,000 crore in first phase and creation of more than 1.5 lakh jobs.

The idea is to attract large firms interested in serving export markets as they will bring with them capital, technology, good management practices and links to world markets. This in turn will help create ecosystem around them in which productive small and medium firms will emerge and flourish. First CEZ has been established at JNPT Mumbai.