sez- india - china prospective

8/8/2019 Sez- India - China Prospective

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AABBSSTTRRAACCTT

A Special Economic Zone in short SEZ is a geographically bound zones where the economic

laws in matters related to export and import are more broadminded and liberal as compared to

rest parts of the country. SEZs are projected as duty free area for the purpose of trade, operations,

duty and tariffs. SEZ units are self-contained and integrated having their own infrastructure and

support services.

Within SEZs, a unit may be set-up for the manufacture of goods and other activities including

processing, assembling, trading, repairing, reconditioning, making of gold/silver, platinum

jewellery etc.

As per law, SEZ units are deemed to be outside the customs territory of India. Goods and

services coming into SEZs from the domestic tariff area or DTA are treated as exports from India

and goods and services rendered from the SEZ to the DTA are treated as imports into India.


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SSPPEECCIIAALL EECCOONNOOMMIICC ZZOONNEE ((SSEEZZ)) AAnn OOvveerrvviieeww

The world first known instance of SEZ have been found in an industrial park set up in Puerto

Rico in 1947. In the 1960s, Ireland and Taiwan followed suit, but in the 1980s China made the

SEZs gain global currency with its largest SEZ being the metropolis of Shenzhen.

From 1965 onwards, India experimented with the concept of such units in the form of Export

Processing Zones (EPZ). But a revolution came in 2000, when Murlisone Maran, then

Commerce Minister, made a tour to the southern provinces of China. After returning from the

visit, he incorporated the SEZs into the Exim Policy of India. Five year later, SEZ Act (2005)

was also introduced and in 2006 SEZ Rules were formulated.

Early Start:

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. With a view

to overcome the shortcomings experienced on account of the multiplicity of controls and

clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view

to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was

announced in April 2000. This policy intended to make SEZs an engine for economic growth

supported by quality infrastructure complemented by an attractive fiscal package, both at the

Centre and the State level, with the minimum possible regulations.

Step towards SEZ Act, 2005:

To instill confidence in investors and signal the Government's commitment to a stable SEZ

policy regime and with a view to impart stability to the SEZ regime thereby generating greater

economic activity and employment through the establishment of SEZs, a comprehensive draft

SEZ Bill prepared after extensive discussions with the stakeholders. A number of meetings were

held in various parts of the country both by the Minister for Commerce and Industry as well as

senior officials for this purpose. The Special Economic Zones Act, 2005, was passed by

Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005. The draft


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SEZ Rules were widely discussed and put on the website of the Department of Commerce

offering suggestions/comments. Around 800 suggestions were received on the draft rules. After

extensive consultations, the SEZ Act, 2005, supported by SEZ Rules, came into effect on 10th

February, 2006, providing for drastic simplification of procedures and for single window

clearance on matters relating to central as well as state governments.

The main Objectives of the SEZ Act are:

Generation of additional economic activity Promotion of exports of goods and services; Promotion of investment from domestic and foreign sources; Creation of employment opportunities; Development of infrastructure facilities;

The SEZ Rules provide for:

y Simplified procedures for development, operation, and maintenance of the SpecialEconomic Zones and for setting up units and conducting business in SEZs;

y Single window clearance for setting up of an SEZ;y Single window clearance for setting up a unit in a Special Economic Zone;y Single Window clearance on matters relating to Central as well as State Governments;y Simplified compliance procedures and documentation with an emphasis on self

certification.

Types of SEZ:

Sector Specific SEZ-units may be set up for

Manufacture of one or more goods in a sector

Rendering of one or more services in a sector


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Multi-product SEZ-units may be set up for

Manufacture of two or more goods in a sector or goods falling in two or more sectors

Trading and warehousing

rendering of two or more services in a sector or services falling in two or more sectors.

Other SEZs

SEZ in a port or airport

SEZ for Free Trade and Warehousing


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y Flexibility to keep 100% of export proceeds in EEFC account. Freedom to make overseasinvestment from it.

y Commodity hedging permitted.y Exemption from interest rate surcharge on import finance.y SEZ units allowed to write-off unrealized export bills.

Central Sales Tax Act:

y Exemption to sales made from Domestic Tariff Area to SEZ units.Service Tax:

y Exemption from Service Tax to SEZ unitsEnvironment:

y SEZs permitted to have non-polluting industries in IT and facilities like golf courses,desalination plants, hotels and non-polluting service industries in the Coastal Regulation

Zone area

y Exemption from public hearing under Environment Impact Assessment NotificationCompanies Act:

y Enhanced limit of Rs. 2.4 crores per annum allowed for managerial remunerationy Agreement to opening of Regional office of Registrar of Companies in SEZs.y Exemption from requirement of domicile in India for 12 months prior to appointment as

Director.

Drugs and Cosmetics:

y Exemption from port restriction under Drugs & Cosmetics Rules.Sub-Contracting/Contract Farming

y SEZ units may sub-contract part of production or production process through units in theDomestic Tariff Area or through other EOU/SEZ units

y SEZ units may also sub-contract part of their production process abroad.y Agriculture/Horticulture processing SEZ units allowed providing inputs and equipments

to contract farmers in DTA to promote production of goods as per the requirement of

importing countries.


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RROOLLEE AANNDD TTEERRMMSS && CCOONNDDIITTIIOONNSS OOFF SSEEZZ

State Governments will have a very important role to play in the establishment of SEZ.

Representative of the State Government, who is a member of the Inter-Ministerial Committee on

private SEZ, is consulted while considering the proposal. Before recommending any proposals to

the Ministry of Commerce & Industry (Department of Commerce), the States must satisfy

themselves that they are in a position to supply basic inputs like water, electricity, etc.

y Only units approved under SEZ scheme would be permitted to be located in SEZ.y The SEZ units shall abide by local laws, rules, regulations or bye-laws in regard to area

planning, sewerage disposal, pollution control and the like. They shall also comply with

industrial and labour laws as may be locally applicable.

y Such SEZ shall make security arrangements to fulfill all the requirements of the laws,rules and procedures applicable to such SEZ.

y The SEZ should have a minimum area of 1000 hectares and at least 25 % of thye area isto be earmarked for developing industrial area for setting up of units.

y Minimum area of 1000 hectares will not be applicable to product specific and port/airportbased SEZs .

y Wherever the SEZs are landlocked, an Inland Container Depot (ICD) will be an integralpart of SEZs.


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AADDVVAANNTTAAGGEESS && DDIISSAADDVVAANNTTAAGGEESS OOFF SSEEZZ

A SEZ unit which has been set up for carrying on manufacturing, trading or service activity has

both advantages as well as disadvantages. SEZ advantages are quite far more as compared to its

disadvantages which are almost negligible.

Advantages:

y 15 year corporate tax holiday on export profit 100% for initial 5 years, 50% for the next5 years and up to 50% for the balance 5 years equivalent to profits ploughed back for

investment.

y Allowed to carry forward losses.y No license required for import made under SEZ units.y Duty free import or domestic procurement of goods for setting up of the SEZ units.y Goods imported/procured locally are duty free and could be utilized over the approval

period of 5 years.

y Exemption from customs duty on import of capital goods, raw materials, consumables,spares, etc.

y Exemption from Central Excise duty on the procurement of capital goods, raw materials,and consumable spares, etc. from the domestic market.

y Exemption from payment of Central Sales Tax on the sale or purchase of goods, providedthat, the goods are meant for undertaking authorized operations.

y Exemption from payment of Service Tax.y The sale of goods or merchandise that is manufactured outside the SEZ (i.e., in DTA) and

which is purchased by the Unit (situated in the SEZ) is eligible for deduction and such

sale would be deemed to be exports.

y The SEZ unit is permitted to realize and repatriate to India the full export value of goodsor software within a period of twelve months from the date of export.


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y Write-off of unrealized export bills is permitted up to an annual limit of 5% of theiraverage annual realization.

y No routine examination by Customs officials of export and import cargo.y Setting up Off-shore Banking Units (OBU) allowed in SEZs.y OBU's allowed 100% income tax exemption on profit earned for three years and 50 % for

next two years.

y Exemption from requirement of domicile in India for 12 months prior to appointment asDirector.

y Since SEZ units are considered as public utility services, no strikes would be allowed insuch companies without giving the employer 6 weeks prior notice in addition to the other

conditions mentioned in the Industrial Disputes Act, 1947.

y The Government has exempted SEZ Units from the payment of stamp duty andregistration fees on the lease/license of plots.

y External Commercial Borrowings up to $ 500 million a year allowed without anymaturity restrictions.

y Enhanced limit of Rs. 2.40 crores per annum allowed for managerial remuneration.Disadvantages

y Revenue losses because of the various tax exemptions and incentives.y Many traders are interested in SEZ, so that they can acquire at cheap rates and create a

land bank for themselves.

y The number of units applying for setting up EOU's is not commensurate to the number ofapplications for setting up SEZ's leading to a belief that this project may not match up to

expectations.


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IIMMPPAACCTT OONN IINNDDIIAANN EECCOONNOOMMYY

1. Employment:

It is expected that if all 577 formal approvals become operational then Employment numbers will

be more than 2 millions directly.

2. Exports:SEZ has contributed good amount of exports revenue for country. In the year 2009-2010 India

seen growth of 121.40% of in exports from SEZs compare to previous year.

Year Value (Rs. Crore) Growth Rate (Over Previous Year)

2003-2004 13,854 39%

2004-2005 18,314 32%

2005-2006 22 840 25%2006-2007 34,615 52%

2007-2008 66,638 93%

2008-2009 99,689 50%

2009-2010 2,20,711.39 121.40%


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3. Exports from special economic zones (SEZs) rose 33 per cent during the year to end-March 2009. Exports from such tax-free manufacturing hubs totalled US$ 18.16 billion last

year up from US$ 13.60 billion a year before.

4. Exports from 98 functional special economic zones (SEZs) increased by over 25 per centto US$ 8.19 billion between April and June this year.

5. The government has allowed companies located in SEZs to claim service tax refund forservices availed outside the tax-free export zones.


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MMIINNIIMMUUMM LLAANNDD RREEQQUUIIRREEMMEENNTT

Sr

NoNature of SEZ

Minimum

Contiguous

Area Required

(Max 5000 ha)

Minimum Processing Area Required

1Multi Product 1000 ha 35%

2Sector Specific 100 ha 50%

3SEZ in Port or Airport 100 ha 50%

4SEZ for Free Trade Zone and

Warehousing40 ha

50% , 1 lakh sq. m of built up area,(notexceed 20% of the Processing area in

Sector Specific SEZ)

5

Gems and Jewellery,Bio-technology, Non-conventional Energy

10 ha 50%

6

Electronic Hardware andSoftware, Information

Technology10 ha 50%

Note

1 hectare = 2.421 acres = 10,000 sq.metres; 1000 hectares = 2500 acres

Minimum Investment Requirements

Sector Specific SEZs

y Investment should be more than Rs. 250 crores ory N

et worth* of Rs. 50 crores

Multi product SEZs

y Investment should be more than Rs. 1000 crores ory Net worth* of Rs. 250 crores


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Major SEZ Benefits:

Development Stage(Capital Goods, Consumables,

Components & Spares)

No Customs DutyNo Excise DutyNo Sales TaxN

o Service TaxNo Purchase TaxNo Stamp duty &Registration FeesNo Stamp duty onMortgagesNo Electricity duty

No Customs DutyNo Excise DutyNo Sales TaxN

o Service TaxNo Purchase TaxNo Stamp duty &Registration FeesNo Stamp duty onMortgagesNo Electricity duty

Operation Stage

(Raw Materials, Consumables,

Components & Spares)

As above As above

Profit StageExemption from IncomeTax

No Income Tax for 10years (80 IAB)

Results of Benefits:

1. Reduced Cost of infrastructure2. Reduced Cost of Utilities3. Reduced Cost of Raw Material4. Reduced Cost of Capital5. Reduced Cost of Manpower6. Operational Ease Enabled7. Baskets of Benefits leading to global competitiveness


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CCUURRRREENNTTFFAACCTTSS OOFF SSEEZZss IINN IINNDDIIAA

Current Fact Sheet:


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SSEEZZ CCOONNTTRROOVVEERRSSYY

Land, especially agricultural land is a very sensitive issue in India. There are millions of people

whose livelihood depends on agricultural land. But the introduction of SEZ in India has resulted

in the dispossession of agricultural land and has affected the livelihood of farmer at large. In

against of this, farmers first protested to safeguard their interests through litigation and court

cases challenging the establishment of SEZs. But later on, the resistance against SEZ in India

became massive when political parties also joined the farmers.

Jamnagar Incidence

In November 2006, farmers from the Jamnagar District in Gujarat moved the High Court of

Gujarat and later to the Supreme Court in order to challenge the setting-up of a 10,000-acre

(approx. 4,000-ha) SEZ by Reliance Infrastructure. They claimed that the acquisition of large

tracts of agricultural land in the villages of the district not only violated the Land Acquisition Act

of 1894, but was also in breach of the public interest. This led the Government to consider

putting a ceiling on the maximum land area that can be acquired for multi-product zones and

decide to go slow in approving SEZs.

Nandigram Violence

The Nandigram violence is another famous incidence related to SEZ controversy. Nandigram is a

rural area in Purba Medinipur district of the Indian state of West Bengal. It is located about 70

km south-west of Kolkata, on the south bank of the Haldi River, opposite the industrial city of

Haldia.

In 2007 the West Bengal government decided to allow Salim Group to set up a chemical hub at

Nandigram under the SEZ policy. Farmers of that village were against it. So, on the order of the

Left Front government on 14 March, 2007, more than 3,000 heavily armed police stormed the

Nandigram area. The main objective was to remove the protestors in order to expropriate 10,000

acres of land for a Special Economic Zone (SEZ) to be developed by the Indonesian-based Salim

Group. During this incidence, police shot dead at least 14 villagers and wounded 70 more

including children and women.


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DDIIRREECCTT TTAAXX CCOODDEE ((DDTTCC)) IIMMAAPPAACCTT

31 Aug, 2010, ET Bureau

SEZ tax sops retained till 2014, but will need to pay 20% MAT

NEW DELHI: In a partial reprieve to special economic zones (SEZs), the Direct Taxes Code Bill

has proposed to retain the current tax system of exemptions for zones notified till 2012 but imposed

a 20% minimum alternate tax.

The code will grandfather the existing unavailed exemptions for units that commence operations

by 2014, said Sunil Mitra, revenue secretary on Monday after the Bill was tabled in the Lok

Sabha.

As per the Bill, any zone notified before March 31, 2012 and any unit that commences commercial

operations by March 31, 2014 will be able to enjoy profit-linked tax exemption even as the Bill

marks a shift in the criterion of corporate tax holidays.

SEZ units get 100% tax exemption on profits earned for the first five years, a 50% exemption for

the next five years and another 50% exemption on re-invested profits in the following five years.

SEZ developers, on the other hand, get 100% tax exemption on profits for 10 years, which they can

choose in the block of the first 15 years.

The Bill has suggested a phased withdrawal of the current regime of tax exemptions that are linked

to profits, and replacing it with tax sops linked to investments. The finance ministry proposes to

implement the DTC by April 1 2012.

The finance ministry is hopeful that this will help offset the revenue loss of nearly `80,000 crore

from tax exemptions, Mr Mitra said.

But developers and units have opposed the move, as it would make investments in such zones

unattractive. For sectors such as IT, where investments made are relatively low, it would definitely

lead to lower exemptions.

The tax-free status is partly taken away by the imposition of 20% MAT on such units though the

MAT will be creditable in future years, said Neeru Ahuja, partner, Deloitte Haskins & Sells.

At present, there are nearly 576 formerly approved special economic zones of which 114 areoperational. They are expected to garner nearly `10 lakh crore of investments.

It is a welcome move given the original position of the code. But the tax exemption should have

been continued in perpetuity, as this will hurt the SEZ policy. The 20% MAT adds more pressure

on investors and skews the picture from a cash-flow perspective, said Abhishek Goenka, partner,

BMR Advisors.


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SSEEZZ:: TTHHEE CCHHIINNEESSEE WWAAYY

Special Economic Zones (SEZ's) are development zones established by the Peoples Republic of

China (PRC) to encourage foreign investment in China, bringing much need jobs, technicalknowledge, and future tax revenues in return for significant tax concessions at start-up of the

operations and over a number of years. They are not unlike SEZs in other part of the world.

SEZ has been one of the key reasons for the huge FDI that China has managed to attract so far.

The concept of SEZ is fundamental model of China FDI model, where it developed SEZ on a

focused manner. This is to be remembered that, this did not happen overnight and it has taken 25

years for China to become what it is today.

The first four SEZs set up in China in 1980 were Shenzhen (32,750 hectare (Ha)), Zhuhai

(12,100 Ha), and Shantou (23,400 Ha) in Guangdong Province and Xiamen (13,100 Ha) in

Fujian Province, which are multi-product SEZs. They were chosen specifically because of their

proximity to major regional world trading centers of Hong Kong, Macao and Taiwan. The

understanding was that this proximity would make it easier to attract FDI and in turn would

facilitate the firms to shift parts of their production processes to China.

In 1984, fourteen coastal towns were opened up to form Open Coastal Zones and in 1988 the

island of Hainan (3,40,000 Ha) received full provincial status and was officially declared as the

Fifth SEZ. The five SEZs cover an area of 421,350 hectare. SEZs apart, China has

conceptualized various other forms of free zones depending upon their geographical locations,

type of investments and regional political structure such as Open Coastal Areas, Open Economic

Zones, state level Economic and Technology Development Zones (ETDZs) and FTZs. The

ETDZs cover an area of 30,000 hectare.

The contribution of Chinese SEZs to the countrys exports is in the range of 15-23 per cent.

These zones, taken together, employ more than two million people directly and approximately 16

million overall. Cumulatively, 20 per cent of the total FDI into China has made its way into

SEZs. Prominent industries established in these zones are textile and garments, metal works and


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machinery, trading, warehousing, logistics and high technology enterprises, chemicals and

pharmaceuticals and healthcare product manufacturing.

Benefits of an SEZ:

The biggest benefit to the foreign investor is significant tax concessions during the early life of

the project. These rates can vary by site and are subject to change from time to time. A typical

example of the PRC tax concessions offered to a manufacturing startup typically looks like:

y No tax during start-up years before making a profity The first year that your company makes a profit starts the "Tax Clock" and is year oney The first and second year after the tax clock starts, there is no tax.y For years three and four, there is 1/2 of the normal tax rate.y In the fifth year, the company pays the full normal tax rate.


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IINNDDIIAA--CCHHIINNAA CCOOMMPPAARRIISSOONN

Issue China India

Size

Very big. Typically in hundreds of

hectares. Even 10 hectares will do.

It may be interesting to note that total Valid In-principle approved 155 SEZs in India is less thanthe land area of Chinas one SEZ.

Number China has only 5 SEZsCurrently India has 577 formallyapproved SEZz

LocationWell thought out and located onlyon coasts. To facilitate exports andimports easily.

Anywhere. No restriction.

Labour laws Relaxed in the SEZs. Flexibility is totally absent.

Policy RegimeExperimentation of liberal policiesin the specified areas whileinsulating them from the rest of thecountry.

Based on fiscal sops.

InvestorsBasically foreigners who are wooedwith sops and promise of stability inpolicy.

Basically locals. Not foreigninvestor driven; which should havebeen the case.

CommencementIn 1979

In 1969 with the export processingzone concept. But failed to mustercourage in giving these regionsforeign territory status till the year

2000 when Murasoli Maranannounced the SEZ policy.

NumberOnly six: Shenzhen, Zhuhai,Shantou, Xiamen, Hainan andPudong

Anywhere and any number. So far28 operational. About 200 receivedapprovals.

Tax holidays Present. Longer and steeper than in China.

Other Comparative Factors:

y China's SEZ initiative is government driven. But in India the private sector will developmost of them. There is no minimum area requirement to set up an SEZ in China, unlike

as in India. And China does not offer tax incentives across the board to all companies, as

India does.


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y Chinese incentives differ from zone to zone and are based on the number of years ofoperation, use of advanced technologies, extent of exports and the type of activities

indulged in. For example, companies involved in building infrastructure get special tax

benefits.

y And though India's policy is a "please-all" one, many Indian corporate prefer the Chineseway.

y China's SEZ initiative is linked to the opening up of its economy. It goes back to the1980s when China was looking for a way to invite private and foreign investment. India's

SEZ policy comes 15 years after it kicked off economic liberalisation. And its goals are

many - building infrastructure, creating employment or inviting foreign investments


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CCHHIINNAA SSEEZZ && NNEEWW LLAABBOOUURRRREEFFOORRMMSS

New Chinese Labour Laws May Force Flight ofForeign Investment

07 September 2010

Overseas companies may no longer find China a lucrative country to set up manufacturing units

after the newly-drafted labour laws in southern China's Shenzhen special economic zone (SEZ)

were introduced, aimed at empowering workers to collectively negotiate higher wages.

The draft law scheduled to be reviewed this month, allows workers in the manufacturing hub of

Shenzhen SEZ to collectively bargain for higher salary if the wages of the majority of workers are

less than half the average pay level in the city.

The average monthly wages for factory workers in the city are about 3,900 Yuan ($560), while

workers at most of the manufacturing units at Shenzhen SEZ are paid between 1,100 Yuan ($146)

to 1,500 Yuan ($220).

The new labour draft comes after the Shenzhen SEZ was hit by a series of wage disputes mainly at

Japanese auto parts units that saw production grinding to halt until the companies agreed to hike

wages.

The new laws would allow workers at Shenzhen SEZ demand wage hikes of as much as 70 per

cent in order to bring their salary level to that of city workers.

Labour strikes started in May in Shenzhen SEZ and in nearby cites in Guangdong province,

affecting parts suppliers of Japanese carmakers like Honda and Toyota.

Taiwan's Hon Hai Precision Industry, the world's largest contract manufacturer to companies like

Apple, raised workers' wages at its Shenzhen plant by 66 per cent from 1 October 2010, in a bid to

prevent a spate of worker suicides the consequent rising public anger against it.

Overseas firms in China are now increasingly facing labour issues with migrant workers, many

from the vast countryside, demanding better pay and service conditions.

After a series of copy-cat strikes at Shenzen, analysts had then said that China was rapidly turning

into a developed market from an emerging market and labour costs were set to rise. They said carmakers have little choice but to accept higher costs and wages if they want to remain in business in

China.

Shenzhen SEZ, established in 1980, comprises four of the six districts of Shenzhen City in

Guangdong Province spanning an area of 493km that turned the city from a cluster of fishing

villa es with a o ulation of 30 000 into a boomin metro olis of 8.9 million.


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Shenzhen, which is often seen as a test bed for economic reform in China, had an output of $120

billion last year. Year after year, Shenzhen has delivered double-digit growth but workers' salaries

have remained the same since the past decade.

Shenzhen became the first area in China to be designated as a Special Economic Zone that could

accept foreign investment, under reforms brought out by the late Deng Xiaoping.

Overseas companies were lured into investing in Shenzhen as it offered lower taxes, cheap power,

less red tape and abundant cheap labour that would later set the place to lead the country's explosive

manufacturing-based economic growth.

But with social unrest due to huge differences in wages between workers at Shenzhen SEZ to those

working in cities, the country saw mass strikes and Beijing for the first time remained a mute

spectator.

"If you are a foreign enterprise and cannot afford to pay higher wages, then get out of China," one

Guangdong provincial official is reported to have said.

But many overseas companies are now pondering pulling out of China as cheap labour was one of

the prime reasons that made them invest in the country in the first place.

Some companies like Foxconn have already decided to shift some of their manufacturing units from

Shenzhen to Northern China, where labour costs are still low.

Foxconn is planning to build a new plant in Zhengzhou, capital of Central China's Henan province

(Source: http://groups.google.com/group/stocktalks/topics)


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IISS CCOOMMMMUUNNIISSMM IISS BBEETTTTEERRTTHHAANN DDEEMMOOCCRRAACCYY IINNCCAASSEE OOFFFFAASSTTEERR

DDEEVVEELLOOPPMMEENNTT OOFF CCOOUUNNTTRRYY??????

India being a democratic country, political system of governance either carried out by the people

directly or by elected representatives. Here the representative of people from different parts of

India carries different views towards the social and economical growth of the country. Where as

China, Communism is a political ideology that is based on a common ownership, mainly

concerned with equality and fairness is focused while taking major decision due to its centralized

political structure. This is the main reason because China can take decisions faster unlike India

where representative of people with different motives and views affects the decision taking

ability of government.

India is seeking lots of major reforms like Land acquisition reforms, Labor Reforms that are in

pipeline but due to different political views towards those reforms, still they are unable to enact

them at faster pace. As the ongoing debate about them in India shows, theyre the latest example

of how ideas that work just great in Communist China dont quite translate so well in Democratic

India. India, unlike China, isnt a dictatorship. Indias leaders cant just railroad through policies

the way Chinas communists do.

All in all, unless and until the views of political parties in India is focused and centralised

towards the India, India may not be able to achieve those highs what China has achieved.


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CCOONNCCLLUUSSIIOONN

India has 363 notified SEZs as on 27th August, 2010 in addition to 19 existing zones established

before the enactment of the SEZ Act 2005 as compared with the US, China, Indonesia,

Philippines and Thailand, where the numbers of SEZs are much lower and the land areas of their

multi-product SEZs are huge in size. Total 363 SEZs are in the pipeline due to aggressive

policies adopted to promote them as growth drivers but are delayed for notification due to land

acquisition problems, lower growth prospects for some specific zones, etc. No doubt, the SEZs

are promoting infrastructure and also instrumental in increasing manufacturing growth and

thereby exports. But the growing number of SEZs with sector-specific small sized fragmented

zones may not yield the desired results.

sez- india - china prospective

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