fdi in india and its growth linkages - Department Of Industrial Policy ...

Foreign Direct Investment in SEZs
Some of the policy measures taken to attract foreign direct investment (FDI) in Special Economic Zones (SEZs)
include:
i. FDI up to 100 per cent under the automatic route for all manufacturing activities, except arms and ammunition,
explosives and allied items of defence equipment, defence aircraft and warships, atomic substances, narcotics,
psychotropic substances and hazardous chemicals, distillation and brewing of alcoholic drinks, and cigarettes/ cigars
and manufactured tobacco substitutes.
ii. 100 per cent FDI allowed for development of townships including housing, commercial and recreational facilities on
a case-by-case basis.
iii. Facility to foreign companies to set up manufacturing units in SEZs as branch operations on a standalone basis
without approval from the RBI.
Further, in the Special Economic Zones notified under the SEZ Act, 2005 and the modified SEZ Act, 2006, a
substantial amount of FDI has already been made. Some SEZs with a major FDI component of investment are:
� Apache Sez Development India Private Ltd., Andhra Pradesh
� Brandix India Apparel City Private Ltd., Andhra Pradesh
� Emaar Hills Township Private Ltd., Andhra Pradesh
� Zydus Infrastructure Private Ltd., Gujarat
� Esar Hazira SEZ Limited, Gujarat
� DLF Limited, Haryana
� Tanglin Development Limited, Karnataka
� M/s Information Technology Park Limited, Karnataka
� Quarkcity India Pvt. Ltd., Punjab
� Flextronics Technologies (India) Private Limited, Tamil Nadu
� SIPCOT SEZ, Tamil Nadu (Foxconn & Motorola as co-developer) – Dell (unit)
SPECIAL ECONOMIC ZONES (SEZS) AND FDI IN INDIA
Special Economic Zones (SEZs) are set to see major investments after the straightening out of certain regulatory
tangles. According to India’s Commerce Secretary, Mr. G. K. Pillai, India has approved 513 SEZs till August 2008, of
which 250 have been notified. Investments are expected to cross US$45.73 billion by December 2009, providing
incremental employment to 800,000 people. In December 2008, the government cleared 22 proposals for setting up
SEZs. The proposals included a major foreign direct investment (FDI) project by a Dubai-based developer.
4.7 Employment in SEZs
The number of jobs created often determines the success of SEZs. In a labour-surplus developing economy such as
India, employment is among the top priorities. The number of people employed in SEZs in India from February 2006
to July 2008 is shown below in Table 4.6.
Table 4.6 shows that the total employment provided by Central Government SEZs (199,330 people) is higher than that
by private/state government SEZs and notified SEZs (149,873 persons).
Table 4.7 indicates that employment provided by central government SEZs is four times higher than that by the state
government/private SEZs for the year 2007-08. Also the number of employed persons per unit are 172 and 111 for
central and state government SEZs, respectively. This implies that central government SEZs create more opportunities
for employment than the other SEZs. Among the central government SEZs, the highest employment providers are the
37