New SEZ law to boost textile, gems exports

The long awaited law on the special economic zone (SEZ), to be passed in the next session of the Parliament, is expected to boost the textile and gems and jewellery exports from the country.

The new legislation is expected to provide special incentives for the new textile and gems and jewellery units proposed to be set up in the SEZs.

The Union textile ministry is co-ordinating with other the inter-ministerial groups to the discuss the issues such as power cost, labour reforms and development of port infrastructure amongst others to be addressed in the new SEZ policy.

"Our ministry have requested the Finance Minister P Chidambram and the Commerce Minister Kamal Nath to provide special incentives to the new units set up in the SEZs to make them internationally competitive," Shankarsinh Vaghela, Union textile minister told Business Standard.

He was in Ahmedabad to attend a pre-Budget discussion on textile industry, organised by Gujarat Chamber of Commerce and Industry (GCCI).

The minister will meet the finance secretary and the revenue secretary, among others, on Monday to discuss the special incentives and subsidy schemes to be provided to the textile sector in the forthcoming Budget.

"The Indian gem and jewellery sector is one of the most dynamic and the fastest growing sectors. The SEZ Act, along with the liberalised government policies, will provide a conducive environment and will provide impetus for the growth of this sector," said Bakul Mehta, chairman, Gems and Jewellery Export Promotion Council (GJEPC).

The textile exports are expected to grow from the present $14 billion to over $50 billion in the next five years, while the gem and jewellery exports are expected to exceed the $16 billion mark by 2007.

The gems and jewellery exports grew by 38 per cent to $ 14, 329.23 million in the January- December 2004 period as compared with $10,392.83 million in the corresponding period of the previous year.

"Gujarat being one of the leading states for textile and gems and jewellery exports, we want the SEZ legislation to have flexible labour laws. At the state level, we have taken various policy reforms in the textile sector, which include setting up of SEZ, which will have relaxed labour laws and no import duty.

"Gujarat accounts for over 25 per cent of the Indian textile exports, the state government will come up with special incentives for the textile and gems and jewellery sector to be internationally competitive," said Anil Patel, state minister for industries.