Progress Report for India’s SEZs

Posted by Reading Time: 2 minutes

Aug. 9 – In India, land is the subject matter of state governments and, as such, land for special economic zones (SEZs) is obtained according to the policy and practices of the respective state governments. According to the records available for 381 SEZs, 82.3 percent of land is waste/barren/dry/industrial, 15 percent of land is single crop and 2.7 percent of land is double crop.

The main objectives of the SEZ Scheme are:

  • Generation of additional economic activity
  • Promotion of exports of goods and services
  • Promotion of investment from domestic and foreign sources
  • Creation of employment opportunities
  • Development of infrastructure facilities

The SEZs are required achieve positive net foreign exchange earnings to be considered cumulatively for a period of five years from the commencement of production, failing which the units shall be liable for penal action under the provisions of the Foreign Trade (Development and Regulation) Act, 1992. Though, no export targets have been laid down for SEZs. As of June 30, 2011, an investment of Rs. 212,914 crore roughly has been made in SEZs and the total direct employment in SEZs is 714,412 persons. Economic advantages and duty concession are permissible to the SEZ developers as per the provisions of the SEZ Act 2005.

Studies by the Department of Commerce have shown that SEZs have created an important local area impact in terms of direct – as well as indirect – employment, materialization of new activities, changes in consumption patterns and social life, and human development facilities affecting education and healthcare.

In addition to seven central government SEZs and 12 state/private sector SEZs established before the enactment of the SEZ Act, 2005, formal approval has been accorded to 585 proposals, out of which 381 SEZs have been notified. A total of 143 SEZs have commenced exports.

Dezan Shira & Associates is boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in India. To contact the firm, please email, visit, or download the firm’s brochure here.