Revamp of SEZ Policy to Meet Challenges Faced by Exporters
Commerce & Industry Minister
Reviews Implementation of Recommendations of Baba Kalyani
Committee on SEZ
Commerce and Industry & Railways Minister Piyush Goyal chaired a meeting on
9 January 2020 in New Delhi to review the remaining recommendations of the Baba
Kalyani report on Special Economic Zone (SEZ) policy
of India. The meeting was attended by members of the Baba Kalyani
group along with representatives from the Department of Revenue, Department of
Legal Affairs and legal firms.
Commerce and Industry Minister examined the
revamp of the SEZ policy with a view to meeting the global challenges being
faced by Indian exporters. Discussions were also held to find a way out for
implementation of the remaining recommendations in order to facilitate the ease
of doing business in the present global market scenario.
The recommendations which have been completed
include review of specific exclusions proposed in NFE computation in light of
Make in India initiative, sharing of duty exempted assets/ infrastructure
between units to be allowed against specific approval, and formalization of
de-notification process for enclaves and delinking its present mandatory usage
for SEZs purpose only. The other implemented recommendations are support to servicification of manufacturing zone, allowing
manufacturing enabling services companies, broad-banding definition of
services/allowing multiple services to come together and flexibility to enter
into a long term lease agreement with stakeholders in Zones in line with the
State policies and the application for constructing minimum built up area by
Developer or Co-developer beyond a period of ten years from the date of
notification of the SEZ on merits of each case..
Other changes and initiatives taken for the
SEZs include delegation of powers to Development Commissioner for shifting of
SEZ unit from one zone to another, supplies of services in DTA against foreign
exchange or Indian Rupees to be counted towards NFE, enable a trust to be
considered for grant of permission to set-up a unit in a SEZ, setting up of
cafeteria, gymnasium, creche and other similar
facilities/ amenities and uniform list of services to SEZ.
The Baba Kalyani led
committee was constituted by the Ministry of Commerce and Industry to study the
existing SEZ policy of India and had submitted its recommendations in November
2018. The objectives of the committee were to evaluate the SEZ policy and make
it WTO compatible, suggest measures for maximizing utilization of vacant land
in SEZs, suggest changes in the SEZ policy based on international experience
and merge the SEZ policy with other Government schemes like coastal economic
zones, Delhi-Mumbai industrial corridor, national industrial manufacturing
zones and food and textile parks.
If India is on the path to become a USD 5
trillion economy by 2025 then the present environment of manufacturing
competitiveness and services have to undergo a basic paradigm shift. The
success seen in services sector like IT and ITeS have
to be promoted in other services sectors like health care, financial services,
legal, repair and design services.
The Government of India has set a target of
creating 100 million jobs and achieving 25% of GDP from the manufacturing
sector by 2022, as part of the flagship Make in India programme. Further, the Government plans to increase
manufacturing value to USD 1.2 trillion by 2025. While these plans are intended
to propel India into a growth trajectory, it requires evaluation of existing
policy frameworks to catalyse manufacturing sector
growth. At the same time, policy needs to be compliant with the relevant WTO
regulations.