The Special Economic Zones (SEZs) policy was launched in April, 2000.  The Special Economic Zones Act, 2005, was passed by Parliament in May, 2005 which received Presidential assent on the 23rd of June, 2005.  The SEZs Rules, 2006 came into effect on 10th February, 2006.  The salient features of the SEZ scheme are:

1. A designated duty free enclave to be treated as a territory outside the customs territory of India for the purpose of authorised operations in the SEZ;
2. No licence required for import;
3. Manufacturing or service activities allowed;
4. The Unit shall achieve Positive Net Foreign Exchange to be calculated cumulatively for a period of five years from the commencement of production;
5. Domestic sales subject to full customs duty and import policy in force;
6. SEZ units will have freedom for subcontracting;
7. No routine examination by customs authorities of export/import cargo;
8. SEZ Developers /Co-Developers and Units enjoy Direct Tax and Indirect Tax benefits as prescribed in the SEZs Act, 2005.

In addition to Seven Central Government Special Economic Zones (SEZs) and 12 State/Private Sector SEZs set-up prior to the enactment of the SEZs Act, 2005, approvals have been accorded to 417 proposals for setting up of SEZs in the country.  Out of 349 notified SEZs 238 SEZs are operational.  There are no SEZs in the Hyderabad Karnataka Region area. States/Union Territories-wise distribution of SEZs established in the country and details of locations of these SEZs are available at www.sezindia.nic.in.

SEZs being set up under the SEZs Act, 2005 and SEZs Rules, 2006 are primarily private investment driven initiatives. No funds are sanctioned by the Central Government for setting up of SEZ. However, the fiscal concessions and duty benefits have been allowed to developers/units as per the SEZs Act, 2005 and Rules thereunder.  As on 30.09.2019, exports from SEZs was ₹ 3,81,912 crores and employment generation was about 21.94 lakh persons and investment of ₹ 5,21,631.44 crore has been made.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha today.

Special Economic Zones: duty-free enclave status and targeted tax incentives enable export-oriented manufacturing and services. The SEZ statutory regime designates duty free enclaves treated as outside the customs territory, permits manufacturing and services with import licence exemption, allows subcontracting and reduced routine customs examination, conditions domestic sales to full customs duty, requires units to achieve Positive Net Foreign Exchange cumulatively, and grants specified direct and indirect tax benefits to developers and units while relying on private investment rather than central capital grants.