Central Idea

The Northeast region’s journey with SEZs has been marked by challenges and missed opportunities.
Despite the approval of five SEZs in the region between 2007 and 2021, none have become operational.

Overview of Unoperational SEZs in NE

Unrealized IT SEZs: The report underscores the delay in establishing IT SEZs in Manipur and Sikkim, both of which were approved in 2013 and 2021 respectively.
Nagaland’s Unfulfilled Promise: Despite approvals dating back to 2007-9, the SEZs in Nagaland remain dormant, representing a missed opportunity for economic growth.
Pending Agro-Products Zone: The agro-products zone approved in Tripura in 2019 is yet to materialize, indicating the need for coordinated efforts to overcome hurdles.

Distinctive Zones: A Special Economic Zone is an area characterized by distinct trade and business regulations set apart from the rest of the country.
Economic Objectives: SEZs aim to enhance trade balance, encourage investments, generate employment, facilitate efficient administration, and amplify economic growth.
Favorable Financial Policies: SEZs offer tailored financial policies that encompass investment, taxation, customs, trading, quotas, and labor regulations.
Tax Incentives: Businesses within SEZs may benefit from tax holidays, a designated period of reduced taxation upon establishment within the zone.

EPZs Pioneering: India embraced the concept of Export Processing Zones (EPZs) with Asia’s inaugural EPZ established in Kandla in 1965.
Genesis: India’s SEZ policy was inaugurated on April 1, 2000, with the intent of bolstering foreign investments and creating a globally competitive environment for exports.
Objectives: The policy aimed to boost exports, level the playing field for domestic enterprises, and provide a comprehensive legal framework for SEZ development and operation.
Regulatory Framework: The SEZ Act of 2005 furnished the regulatory umbrella covering crucial aspects of SEZs and the units operating within them.

Diverse Zone Types: SEZs encompass various categories such as free-trade zones (FTZs), export processing zones (EPZs), industrial estates (IEs), free ports, and more.
Enhanced Foreign Investment: SEZs attract foreign direct investment (FDI) by multinational corporations (MNCs) and international businesses, spurring economic growth

Open to All: Any private, public, joint sector, state government, or its agencies can establish an SEZ.
Foreign Participation: Foreign agencies are also permitted to establish SEZs in India.
States Role: State government representatives within inter-ministerial committees on private SEZs offer consultations on proposals.
Infrastructure Provision: State governments must ensure the provision of essential resources like water and electricity before SEZ proposals are recommended.
Labor Laws: SEZs adhere to normal labor laws, enforced by respective state governments, with a focus on simplification of procedures and introducing single-window clearance.

Economic Boost: SEZs aim to streamline business processes, improve infrastructure, and offer tax benefits, propelling FDI and export growth.
Trade Growth: SEZs contribute significantly to India’s exports by providing a conducive environment for production and export-oriented activities.
Investor Attraction: The relaxation of regulations and access to advanced infrastructure in SEZs entices international investors seeking to capitalize on export-driven opportunities.

The parliamentary report serves as a clarion call to address the stagnation of SEZs in Northeast India and transform the challenges into opportunities.
It underscores the importance of crafting a fresh industrial development scheme that is responsive to the region’s dynamics.
By leveraging the unique strengths of the Northeast, the government has the chance to not only rectify the current situation but also contribute to the inclusive economic growth of the entire nation.