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

FDI IN INDIA AND ITS GROWTH LINKAGES
4.10.10 India vs China
India vs China
India, like China, is also offering a host of incentives like duty-free imports, tax holidays, freedom from customs
procedures, etc. Units operating in these trade zones are given additional incentives and more flexibility in their
operations, like flexible labour laws. Within the SEZ, no permission is required for inter-unit sales or transfer of goods.
One of the comparisons between the SEZs in China and India is the size of the SEZ. In China, each SEZ is well over
1,000 hectares. Though SEZs in India are smaller, the minimum area requirements stipulated for various categories of
SEZs has been increased after the implementation of the SEZ Act, 2005. Several multi-product SEZs can now be set
up with 1,000 hectares of land as in the case of China. The following table presents the minimum area requirements.
An example of an operational multi-product SEZ set up with an area of more than 1000 hectares is the Mundra Port
and Special Economic Zone, Gujarat Adani Port Limited. The physical exports from this SEZ were Rs. 431.59 crore
in 2007-08. It provided direct employment to 1,667 people, of which 26 were women. An investment of Rs. 4,313.07
crore has already been made in Mundra SEZ and the projected investment is around Rs. 29,059.92 crore with direct
employment of 2,08,734 people.
Issues relating to land acquisition have been an important aspect of Special Economic Zones in India. There is no
specific provision for the acquisition of land for Special Economic Zones. Since land is a state subject, it is the primary
responsibility of the state government to ensure that the land use proposed by the developer (be it a State Industrial
Development Corporation or a private company) is earmarked for industrial use. The Board of Approvals of SEZs has
followed the general principle that in the case of land acquisition for SEZs, first priority should be for acquisition of
waste and barren land and, if necessary, single-crop agricultural land could be acquired for the SEZs. If perforce a portion
of double-cropped agricultural land has to be acquired to meet the minimum area requirements, especially for multiproduct
SEZs, the same should not exceed 10 per cent of the total land required for the SEZ. The state governments
have been advised in this regard and they certify accordingly. The Board of Approval only considers those proposals
which have been duly approved by the state government. The total land area proposed in 144 in-principle approvals
given so far is approximately 1,231,563 hectares. This includes 54 multi-product SEZs.
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Table 4.9
Area permits for different types of SEZs
Type Area Area for Special States/ UTs
Multi-product 1000 hectares 200 hectares
Multi-services 100 hectares 100 hectares
IT 100 hectares 50 hectares
Gems and jewellery 10 hectares and minimum 10 hectares and minimum built-up
built-up area of 1 lakh area of 1 lakh square metres
square metres
Bio-tech and Non-conventional energy (including 10 hectares and minimum 10 hectares and minimum built-up
solar energy equipment/cell but excluding SEZs built-up area of are of 40,000 square metres
for non-conventional energy production 40,000 square metres.
and manufacturing )
FTWZ* 40 hectares and minimum 40 hectares and minimum built-up
built-up area of 1 lakh are of 1 lakh square metres
square metres
Source: Department of Commerce, Government of India, (Briefs on Special Economic Zones in India).
Notes: The special states/UTs are union territories including the erstwhile union territory of Goa and the special category states of Assam, Meghalaya, Nagaland,
Arunachal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttarakhand, Sikkim, and Jammu and Kashmir.
* FTWZ refers to Free Trade Warehousing Zones.