Tripura gets its first SEZ
26th Dec, 2019
- The Ministry of Commerce and Industry has notified the setting up of the first ever Special Economic Zone (SEZ) in Tripura.
- It will be developed by Tripura Industrial Development Corporation (TIDC) Ltd.
- The SEZ is being set-up at Paschim Jalefa, Sabroom, South Tripura District, which is 130 km away from Agartala.
- It will be a Sector Specific Economic Zone for Agro-Based Food Processing.
- The estimated investment in the project will be around 1550 Crore.
- The SEZ is estimated to generate 12,000 skilled jobs.
- Rubber based industries, textile and Apparel Industries, bamboo and Agri-food Processing Industries will be set-up in the SEZ.
- Setting up of the SEZ in Sabroom will open up new avenues to attract private investment considering the proximity of the Chittagong Port and construction of the bridge across Feni River in South Tripura which is underway.
- After it is set up, 100 percent Income Tax exemption will be provided on export income for SEZ units under Section 10AA of the Income Tax Act for the first 5 years.
- Also 50 percent exemption will be provided for the next 5 years and 50 percent of the ploughed back export profit for another 5 years.
- A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country.
- SEZs are located within a country's national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration.
- To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing, taxation, trading, quotas, customsand labour regulations.
- Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation.
- The benefits a company gains by being in a special economic zone may mean that it can produce and trade goodsat a lower price, aimed at being globally competitive.
Special Economic Zones in India-
- India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965.
- The second EPZ, SEEPZ (Santa Cruz Electronics Export processing Zone) was set up in Maharashtra in 1974.
- In April 2000, the Government of India adopted a new policy framework titled ‘Export and Import Policy 2000’ for the establishment of public, private or joint public-private SEZs.
- India witnessed remarkable growth in number of formal, notified and operational approvals post enactment of SEZ Act in 2005. The spread of SEZs within the States is to achieve balanced growth across all regions of the country.
- The sector wise distribution of SEZ’s clearly shows that majority of the formal approvals granted have been in IT/ITES sector which comprises nearly 64% of the total formal approvals granted till date.
- The SEZ scheme in India has shown a tremendous growth in infrastructure investment, employment and exports.
SEZs policy in India with respect to frequent changes in the policy environment is one of the major reasons of slackening the confidence of investors to continue and make fresh investments in SEZs. Therefore, to build a strong confidence amongst the potential/existing investors, it is imperative to frame a stable, favourable and highly transparent SEZs policy with long term perspectives.