Export from Special Economic Zones jumped 18% in FY18

Far higher ease of doing business as compared to the rest of India; export promotion council seeks removal of taxes and other such barriers for future growth

Export from Special Economic Zones (SEZs) rose 18 per cent in 2017-18, due to progress in terms of clearances and facilities.

Data compiled by the Export Promotion Council of India for Export Oriented Units and SEZs (EPCES) under the ministry of commerce reported total merchandise and software export of Rs 5,513 billion in FY18, from Rs 4,686 bn the previous year.

The jump was despite levy of Minimum Alternate Tax (MAT), imposition of Dividend Distribution Tax (DDT) and the impending sword of a sunset clause from 2020, when tax benefits are to end. EPCES has urged the government to continue with the exemptions granted to SEZs and EOUs, and to remove MAT and DDT from these zones. There are 204 of these in the country.

"SEZs are the only location where production and services continue without obstruction or hindrance of uninvited, unwanted visitors, a norm in the Domestic Tariff Area (DTA). A safe, secure and peaceful environment, flush with abundant green belts and conducive ambience, definitely helps increase productivity and defect-free products," said Vinay Sharma, officiating chairman of EPCES.

While merchandise export was Rs 2,735 bn in FY18, software export rose 17 per cent to Rs 2,779 bn.

In the SEZs, single-window clearance, approachable development commissioners and approval for new units or changes in the Letter of Permission at monthly meetings of unit approval committees are given as reasons for the higher 'Ease of Doing Business'. As against business in the DTA, where one has to deal with multiple authorities and departments.

"For any foreign investor looking for 500 acres or even more to set up a plant, only an SEZ can allot the land quickly -- land without any encumbrance, litigation or disruption. A single-window clearance can even help the investor start construction in four to six weeks, only possible in SEZs. Investors from other countries may choose to locate their production facilities for export to other countries or to sell in domestic markets, based upon their (regional) choice. It is a boon for anyone to get into production mode very quickly. The ease of doing business, coupled with availability of clean and dependable power, water and other resources, along with educated and trained personnel, is available across SEZs in India," said Sharma.

The top country for export in value remains the United Arab Emirates (Rs 496.9 bn), followed by America (Rs 477 bn). The year gone by also saw an 80 per cent jump in export to Saudi Arabia, along with a surge to Britain, Australia and Singapore.

There also saw an 84 per cent rise in export to China. Also, of 23 per cent to Mozambique, 25 per cent to Italy and 20 per cent to Korea.

"We invite investors to the India SEZs and assure full support of the council to help them set up their business in any of the SEZs," said Sharma.