In march 2000, the government of India announced a new scheme for setting up Special Economic Zone that is SEZ. The policy called for establishing SEZs in the public sector, private sector, joint sector, and by state governments. Even multinational companies can set up a SEZ in India.
A special Economic Zone (SEZ) is a specifically delineated duty free territory and is deemed to be foreign territory for the purposes of trade operations and duties and tariffs. In other words, an SEZ has a different set of laws, rules and regulations, which are different from the law of land.
The units in SEZs have to be net forgien exchange earners but shall not be subjected to any pre-determined value addition or minimum export performance requirements.
The basic aim behind the creation of SEZs is to increase the inflow of foreign investment in India. Another major aim is to provide an internationally competitive setup and an obstacle free economic environment to boost India's exports.
In India itself since the notification of SEZs act in 2006, 435 SEZ had been approved until march 2015 of these, only 189 SEZ have been functional since then. Out of these 189 SEZs all but 20 SEZs were established before 2010, 17 between 2010 and 2013 and the remaining 3 after 2013.
SEZs are a helpful way of increasing the foreign trade growth of a country. We have the example of China in this case, a country who achieved economic growth by establishing successful SEZs .
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