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Govt mulls to convert single-product SEZs to multi-product zones

Wednesday, 18 Sep 2019
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The government is considering a proposal to allow all single product Special Economic Zones (SEZs) to be converted into multi-product ones.

The move will make investments in Special Economic Zones (SEZs) more attractive and increase the viability of projects.

The proposal to allow single product SEZs to be converted into multi-product ones has been examined by the Commerce Ministry and a draft notification on the necessary changes in SEZ rules on minimum area requirement has been tabled before the Director General of Export Promotion under the Central Board of Indirect Taxes and Customs for its inputs.

The minimum land requirement for SEZ is 500 ha while the requirement for single product ones is 50 ha. Both will need to be brought on par if a conversion is allowed.

An amendment has to be made to Rule 5(2) of the SEZ Rules, 2006 which specifies minimum area requirement. If the restrictions on the kind of units that a sector-specific SEZ can attract is eased, it is expected that developers will get proposals from a larger number of interested units and more zones will become operational.

SEZs have, so far, has attracted a total investment of Rs 5,07,644 crore and have provided employment to 20,61,055 persons.

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