All services to come under SEZ umbrella

Commerce and Industry Minister Kamal Nath has said that the proposed legislation on special economic zones will cover all services in addition to manufacturing as well.

The statement assumes significance since the government is toying with the idea of setting up dedicated zones for employment generating services like tourism.

The minister indicated the possible position during an interaction with the Federation of Indian Export Organisation on international trade in healthcare and education services and the Federation of Hotel & Restaurant Association of India.

At present the SEZ scheme covers manufacturing activities and limited services such as trading and information technology services including research and development.

Fieo suggested a major thrust on healthcare and education in the forthcoming Exim Policy. they proposed that healthcare be accorded the status of an industry for short-term financing and income tax purposes and also for the creation of special SEZs for healthcare including hospitals and attached hospitals.

They also demanded the removal of trade barriers such as restrictions to the entry and terms of practice and restrictions on foreign direct investment in this sector, an official release said.

On education services they proposed fostering the establishment of education export zones besides collaborative activities with foreign institutions and international mobility of faculty and students. They pointed out that India's share of foreign students has actually declined from 13,760 in 1993-94 to 7,791 in 2000-01.

The FHRAI sought infrastructure status under section 18-1A under the Income Tax Act among a host of other proposals placed before the Minster, the release said. It also proposed that the government permit visa on arrival for selected source markets for tourism promotion, import of agricultural and dairy products under zero duty schemes and continuation of the zero duty scheme for hotels in respect of duty free imports for essential equipment for raw materials which was allowed in last year's Exim Policy. At present agricultural and dairy products are on the negative list of imports.