SEZs want Domestic Market at Discounted Import Duty as Buyers Cancel Orders, 50% of 2.5mn Labour may be Retrenched

Exporters body for special economic zones EPCES on Sunday, 12 April 2020 urged the commerce ministry to allow units to sell goods at discounted import duty rates in the domestic market as the lockdown and cancellation of orders may impact jobs.

SEZs are treated as foreign territory in terms of customs laws. They are developed as exclusive export zones. Selling of goods by these manufacturing units in the domestic market or outside these zones are treated as imports and therefore the units have to pay full import duty.

“In this crisis time, we have asked the commerce ministry that SEZs may be permitted for sale of their product in domestic market on discounted rate of basic customs duty, at least for one year. This will help them to utilise their capacity and required to save their employees and meet break even,” Export Promotion Council for SEZs and EOUs Vice-Chairman Bhuvnesh Seth said.

He said that in the lockdown, the council has also urged for permission to resume work with minimum staff to execute export orders as exporters will loose clients to China or other Asian countries.

Seth said that due to the lockdown and huge cancellation of export orders, “employment retrenchment will be around 50 per cent“.

He added that liquidity crunch will not allow the zones to pay salaries for April.

The export oriented units and SEZs are providing direct employment to more than 25 lakh person and has attracted an investments of more than Rs 5.50 lakh crore, he said.

“It has contributed Rs 7.87 lakh crore to India’s export basket which is one-third of total national exports,” he added.