Export Processing Zones

About EPZ in India

The concept of Export Processing Zones was introduced to enhance exports in India with the help of tax holidays and lucrative incentive packages, which are the most important aspects About EPZ in India.

Developmental Stages About EPZ in India:

The Export Processing Zones in India had gone through four significant stages of development. The initial stage witnessed the establishment of the Kandla Free Trade Zone in the city of Gujarat in the year 1965 and the consequent establishment of the Santacruz Electronics Export Processing Zone.The limitations faced by these zones are lack of a proper policy and administrative control, weak infrastructure, limited scope for concessions, and lack of adequate incentives.

Therefore, the government of India has been setting up various committees to suggest measures About EPZ in India, in order to check these existing shortcomings.Moreover, in the year 1980 a new scheme was formulated by the government known as the Export Oriented Units Scheme to bring about an over all development in these zones. The second stage witnessed the Second Oil Price Shock, which hampered the export activities significantly and led the establishment of a number of Export Processing Zones to boost the export sector. Thus, Export Processing Zones were set up in West Bengal, Tamil Nadu, Kerala, Uttar Pradesh and in Andhra Pradesh and were named as:

• Falta Export Processing Zone
• Chennai Export Processing Zone
• Noida Export Processing Zone
• Cochin Export Processing Zone
• Visakhapatnam Export Processing Zone

The third stage witnessed economic liberalization in India and restructuring of the entire export processing zone framework in the year 1991. The stage incorporated various measures for example:

• More Fiscal Incentives
• Simplification of Policy Provisions
• Incorporation of more industries like horticulture, re-engineering, agriculture, aqua culture

The fourth stage witnessed the introduction of the concept of special economic zones in the EXIM policy of 1997-2002. Presently, most of the export-processing zones have been transformed into special economic zones. The special economic zones extended their scope to include private companies together with the government organizations and offered space to be used for residential as well as for industrial purpose. They offer various fiscal and non-fiscal benefits to the inhabitants in the form of tax exemption, relaxation in duties, and various incentives to enhance the Indian economy.

Features of the EPZs in India:

• EPZs allow subcontracting activities in case of manufactured goods within India as well as in foreign countries
• Licenses are required for IT industries only
• Tax Holidays allowed for raw materials and capital goods
• Exemption from Corporate Income Tax
• Private bonded warehouses for the purpose of import, re-export, marketing etc.
• Exemption from Customs Duty
• Commodities supplied from DTA are exempted from Excise Duty
• Advantage of choosing the desirable location on the fulfillment of required conditions

Facilities offered by the EPZs in India:

• Uninterrupted Power Supply
• Single Window Clearance
• Cost Effective and Skilled Labor
• Water Connection
• Locational advantage
• Proper Infrastructure
• Medical Facilities

Thus, About EPZ in India, it is clear that they have boosted the overall economy of the country by their policies of exemptions and incentives offered to the industries operating in these zones.