Exports from the Special Economic Zones (SEZs) had increased from Rs. 3,64,478 crore in 2011-12 to Rs. 4,76,159 crore in 2012-13, registering a growth of 31%. The total exports from SEZs in the first quarter of the current financial year 2013-14, have been to the tune of Rs. 1,13,299 crore approximately and there is decline of 4.25% over the exports of the corresponding period of FY 2012-13.

In order to facilitate the manufacturing process and thereby augment exports from SEZs, the period of sub-contracting of production or any production process by large manufacturing SEZ units, except Gems & Jewellery sector SEZ units, to Domestic Tariff Area (DTA) has been increased up to three years at a time subject to certain conditions. This is in addition amendments to the SEZs Rules, 2006 which aim to address the challenges being faced by SEZ Developers and Units on the one hand, while creating a more investor friendly environment on the other. These include reduced minimum area requirements for establishing SEZs, reforms in vacancy norms for land for SEZs, sectoral broad-banding and graded scale for minimum land criteria in order to allow greater flexibility and to facilitate optimal utilization of SEZ land, clarification of norms for transfer of assets by SEZ Units upon their exit etc. The amendments also provide that while there will be no minimum land area requirement for setting up IT/ITES SEZs such IT/ITES SEZs will have to conform with a minimum built up area requirement which is graded as per category of cities based on their IT density.

The Government, on the basis of inputs/suggestions received from stakeholders on the policy and operational framework of the SEZ Scheme, periodically reviews the policy and operational framework of SEZs and takes necessary measures so as to facilitate speedy and effective implementation of SEZs as also to promote investment in SEZs thereby augmenting growth of employment and SEZ exports. In order to address the challenges being faced by SEZs, certain amendments have been carried out in the SEZ Rules, 2006, on 12th August, 2013 with the objective of making the operational framework of SEZs more investors’ friendly and to better achieve the objectives of the SEZ policy. The amendments to the SEZs Rules, 2006 include reduced minimum area requirements for establishing SEZs, reforms in vacancy norms for land for SEZs, sectoral broad-banding and graded scale for minimum land criteria in order to allow greater flexibility and to facilitate optimal utilization of SEZ land, clarification of norms for transfer of assets by SEZ Units upon their exit etc. The amendments also provide that while there will be no minimum land area requirement for setting up IT/ITES SEZs such IT/ITES SEZs will have to conform with a minimum built up area requirement which is graded as per category of cities based on their IT density.

The information was given by the Minister of State in the Ministry of Commerce and Industry Dr. E.M. Sudarsana Natchiappan in Lok Sabha today.

Relaxation of SEZ norms permits extended subcontracting to domestic units and eases area requirements to boost investment. Amendments to the SEZ Rules relax operational requirements: large manufacturing SEZ units (except gems and jewellery) may subcontract production to the Domestic Tariff Area for up to three years subject to conditions; clarification of asset-transfer norms on unit exit; reduced minimum area requirements, reformed vacancy norms, sectoral broad-banding and a graded minimum land scale for flexibility and optimal land utilisation; and removal of minimum land area for IT/ITES SEZs coupled with graded built-up area requirements based on city IT density.