Annual Supplement (2013-14) to the Foreign Trade Policy 2009-14: Govt declares SEZ reforms to arouse investors’ interest

Annual Supplement (2013-14) to the Foreign Trade Policy 2009-14: Govt declares SEZ reforms to arouse investors’ interest

April 28th, 2013

Union Minister for Commerce, Industry and Textiles, Anand Sharma announced The Annual Supplement 2013-14 to Foreign Trade Policy (FTP) 2009-14, which has introduced the following package of measures to revive investors’ interest in SEZs:

• Reduction in the total size of land area required for development of SEZs to its half. For Multi-product SEZ from 1000 hectares to 500 hectares and for Sector-specific SEZ from existing 100 hectares to 50 hectares.
• No minimum land requirement for setting up IT / ITES SEZs
• Introduction of Graded Scale for Minimum Land Criteria which would permit a SEZ an additional sector for each contiguous 50 hectare parcel of land.
• Introduction of Sectoral broad-banding to encompass similar / related areas under the same sector.
• For issues relating to Vacancy of Land:  While, the existing Govt. policy allows for parcels of land with pre-existing structures not in commercial use to be considered as vacant land for the purpose of notifying an SEZ, it has now been decided that additions to such pre-existing structures and activities being undertaken after notification would be eligible for duty benefits similar to any other activity in the SEZ.
• Inclusion of an Exit Policy in existing SEZ Framework: Decision to allow transfer of ownership of SEZ units, including sale.

Several schemes and steps have been introduced and many existing schemes have been modified which include:

• Zero Duty Export Promotion Capital Goods (EPCG) Scheme
• Widening of Interest Subvention Scheme
• Widening the Scope of Utilization of Duty Credit Scrip
• Market and Product Diversification
• Incremental Exports Incentivisation Scheme
• Facility to close cases of default in Export Obligation
• Served from India Scheme (SFIS)
• VKGUY Scheme : Visesh Krishi Gram Upaj Yojana (VKGUY) Exports Benefit Scheme.
• Status Holder Incentive Scheme (SHIS)
• Recredit of 4% SAD
• Duty Free Import Authorization Scheme (DFIA)
• Import of Cars
• Improvement in quality and timeliness of Foreign Trade Data
• Second Task Force on Transaction Cost in International Trade
• Electronic Data Interchange Initiatives 
• Ease of Documentation and procedural simplification
• Widening of items eligible for import for Handloom/Made ups and Sports Goods