Special economic zone advantages and disadvantages pdf

Special economic zones sezs have existed in various forms for nearly two millennia as a method of. Now there has been given another 500 more approvals. Freetrade zones are organized around major seaports, international airports, and national frontiersareas with many geographic advantages for trade. The cost of investments in zone infrastructure and maintenance in many cases. Labor and environmental standards become lower to attract foreign investment. An assessment of potential costs and benefits of sezs in india. Advantages or sezs special economic zones offer many advantages to investors otherwise wary of dealing with an unfamiliar foreign regime. Special economic zones sezs can be regarded as an investment in industrial infrastructure and a services provider to attract and facilitate foreign investment, integrate local firms into global value chains, promote exportoriented growth and generate employment. Special economic zones background information a special economic zone sez is an area within a country that has special economic treatment and policies, for example lower corporation tax rates, better access to economic advisors, and more flexible labour laws. Special economic zones sezs or industrial parks can be an effective instrument to promote industrialization if implemented properly in the right context, as shown in some of the emerging countries, particularly those in east asia. Special economic zone is the most discussed and disputed topic in india. We will be happy to welcome your investment in poland and in our special economic zones. Special economic zone sez is a duly identified and approved geographical area for which is considered to be outside the jurisdiction of indias general economic laws. In terms of policy, the sez can be a useful tool as part of an overall economic growth strategy to enhance industry competitiveness and attract foreign direct investment fdi.

Experience gained in the development of chinas special economic zones, china development bank continued from page 1 existing sezs in china in 2014, there were 6 sezs, 14 open coastal cities, 4 pilot free trade areas and five financial reform pilot areas. When the special economic zone is a success, it increases the gdp, and acts as a good economic model for the policy makers to mimic. Special economic zone advantages and disadvantages pdf download 23 pdf special economic zones sezs are insulated export areas that offer. Development and implementation of special economic zones. Although the performance of many zones remains below expectations, failing either to. Sezs are spreading rapidly around the world special economic zones sezs are widely used in most developing and many developed economies. This paper discusses the advantages and disadvantages of a special economic zone and how it benefits foreign direct investors and the scope of project development in india in a special economic zone. Advantages 15 year corporate tax holiday on export profit 100% for initial 5 years, 50% for the next 5 years and up to 50% for the balance 5 years equivalent to profits ploughed back for investment. This is a very important topic that features in the indian economy section of the upsc syllabus. Many nations have relied heavily on their sezs, and are considered to be a vital ingredient in a developing countrys economic strategy.

Free trade zones, also known as a free commercial zone, are a subcategory of special economic zones. The main advantages of sez units in india can be summarized as promotion of industrialization and economic growth through sustainable development. Within these zones, more specialized zones are now set up to incentivize further investments. Pecial economic zones in outh sia harvard university. Rule of thumb 1 7 in order for economic zones to succeed in achieving their intended policy objectives, they should not be used as a substitute for a countrys larger trade and investment reform efforts economic zones should be used as pilot and demonstrative. A special economic zone sez is a piece of serviced land, typically industrial, that provides infrastructure and connectivity for private firms investing in the sez. Special economic zones sezs are geographically designated areas set aside for specifically targeted economic activities. Special economic zone sezs scheme in india was conceived by the commerce and industries minister murasoli maran during a visit to special economic zones in china in 1999. The government has announced plans to introduce special economic zones to attract direct investment, alleviate largescale unemployment. Sez advantages are quite far more as compared to its disadvantages which are almost negligible. The country is building a series of new special economic zones sez, areas that are designed attract businesses by weakening regulations, offering tax breaks, and waving minimum wage requirements.

Special economic zones sezs geographically delimited areas within which governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support are widely used across most developing and many developed economies. Special economic zones sezs special economic zones are considered to be growth boosters and employment providers. The main policy statement of the first special economic zone policy statement states that these sez units of india shall be offered tax rebates, fiscal incentives and lands at subsidized rates and these are the primary advantages of sez units in india. Progress, emerging challenges, and future directions. Welcome to special economic zone sez india was one of the first in asia to recognize the effectiveness of the export processing zone epz model in promoting exports, with asias first epz set up. As myanmar is opening up to democracy, it is also opening its borders to foreign investment. The pros and cons of sezs single window clearance, v simplified procedures, and vi prepared by rakhine thahaya association yangon abstract a large number of people simply do not understand what an sez is and whether it will be good or bad for their regions. The case of szes in chinashenzhen chinas special economic zones chinas special economic zones 1. Oct 18, 2018 sez, act an attempt made to assess advantages and disadvantages of sezs in india.

Special economic zones terms and condition with advantages. Jordan has seven free zones, with the aqaba special economic zone the most successful. What are the advantages and disadvantages of special economic. Special economic zones terms and condition with advantages and disadvantages of sez. Special economic zone advantages and disadvantages pdf. Special economic zones terms and condition with advantages and. Pdf a study on special economic zones sez in tamilnadu state. Online export import data search select period last day last week last month last year last 7 days last 30 days janmar 2016 janmar 2014 janmar 2015 custom. However, a number of provisions either new or revised have been made for better functioning of these establishments. What is a special economic zone in south africa and how can. For the economic development and to encourage export of various. Social costbenefit analysis of chinas shenzhen special. What is the advantage of sez special economic zone.

Sezs were first developed in 1980 as part of deng xiaopings drive to open up china to the rest of the world and cement chinas place on the global stage as a major economic. The act commenced in february 2016 and several sezs have been designated since. The main policy statement of the first special economic zone policy statement states that these sez. Sez, act an attempt made to assess advantages and disadvantages of sezs in india. India over the past decade has progressively opened up its economy to effectively face new challenges and opportunities of the 21st century. The advantages and disadvantages of constructing freetrade zones as an industrialisation strategy christabel boakye dankwa essay business economics economic policy publish your bachelors or masters thesis, dissertation, term paper or essay. The competitive advantages of zones may also be explained within the frame work of the cluster approach. Those advantages include relaxed labor, environmental, registration and land use laws, along with lower taxes, less cumbersome procurement of materials and more streamlined negotiation of projects. Advantages of the export processing zone with over nations providing epzs within their borders, the advantages of creating epzs appear to be very clear for developing countries. The role and effectiveness of special economic zones in. Rattanawong s proceedings of the international multiconference of engineers and computer scientists 2014 vol ii.

Designing economic zones for effective investment promotion. The category sez covers a broad range of more specific zone types, including free trade zones ftz, export processing zones epz, free zones fz, industrial estates ie, free ports, urban enterprise zones and others. What are the tax benefits for a special economic zone in india. General oecd recommendations for economic zone development. Note, sezs and special administrative regions sars, which describe the status of hong kong and macau, are very different concepts, and should not be confused. Pawel tynel director of the grants and incentives advisory services department at ey.

Today, there are more than 114 sezs all around india. Benefits of special economic zones in indiaa special economic zones sez is a stipulated and dutyfree territorial domain having various economicregulations from those of the country in which it is situated. However, a number of provisions either new or revised have been made for better functioning of. Advantages and disadvantages of special economic zone answers. Physical infrastructure includes electricity, buildings and transport.

Leigh anderson prepared for the agricultural policy and statistics division of the bill and melinda gates foundation evans school policy analysis and research epar professor leigh anderson, pi and lead faculty. Oct 18, 2018 special economic zone advantages and disadvantages pdf download 23 pdf special economic zones sezs are insulated export areas that offer benefits such as duty concessions to manufacturing. Special economic zone advantages and disadvantages pdf download 23 pdf special economic zones sezs are insulated export areas that offer benefits such as duty concessions to manufacturing. The case of szes in chinashenzhen chinas special economic zones china s special economic zones 1. Special economic zones are the oldest of all, thus they have advanced infrastructures, flexible legislations and great locations.

Introduction a special economic zonesez is an economic region in a country which is created for the purpose of promoting manufacturing exports and economic development through a wide variety of special exemptions, relating to taxes, quotas, cu. The special economic zones act 16 of 2014 provides for the designation, promotion, development, operation and management of sezs. Nationwide laws may be suspended inside a special economic zone. Using special economic zones to facilitate development unctad. States are in competition with one another to grab the chances to have fdis. The pros and cons of sez policy as implemented from 1. Special economic zones sezs or industrial parks can be an effective instrument to promote. In these geographically delimited areas, governments facilitate industrial activity through fiscal and regulatory incentives and infrastructure support. On tuesday 29 may 2018, the oxford urbanists and cities that work, an initiative of the international growth centre, hosted a panel event titled can special economic zones sezs drive growth in developing cities. Despite the advantages and clear success cases, sezs have a mixed record. May 22, 2012 benefits of special economic zones in india 1.

Trends in zone development while special economic zones are often treated as an innovative topic in development economics, citywide free zones with goals and methods not too different from those employed in modern zones were in place in gibraltar and singapore as early as 1704 and 1819, respectively. Jul 08, 2016 a free trade zone takes this concept further by reducing any trade barriers and is an exclusive area within special economic zones. Edited by thomas farole gokhan akinci international trade department investment climate department. Feb 16, 2018 the main advantages of sez units in india can be summarized as promotion of industrialization and economic growth through sustainable development. As of june 2008, free zones in egypt employed nearly 6,000 people.

In southeast asia, a prominent case is that of the dawei special economic zone in myanmar which, at an area coverage of 196,000 hectares, is billed as. They are fencedin, dutyfree areas, offering warehousing, storage, and distribution facilities for trade, transshipment, and reexport operations, without the intervention of the customs authorities. The underlying objective is to enable economic activities to encourage the growth in much needed exports. Pdf special economic zone sez problems, promises and. Special economic zones terma and condition with advantages and disadvantages of sez.

India first passed the special economic zone act in the year 2005. Advantages of sez and important special economic zones in india. For developing countries, special economic zones sezs traditionally have had both a policy and an infrastructure rationale. The benefit to firms, along this dimension is through access to export markets rather. The advantages and disadvantages of constructing freetrade.

Special economic zones sezs have been successfully used. The pros and cons posted on january 16, 2015 by the independent in main news the government has announced plans to introduce special economic zones sezs to attract direct investment, alleviate largescale. The promises and challenges of special economic zones. Sez services advantages benefits of special economic zone. Usually, firms that operate in an sez are able to produce at a lower cost than. The impacts of special economic zones evans school of. Special economic zones offer many advantages to investors otherwise wary of dealing with an unfamiliar foreign regime. The indian special economic zones policy intends to make sezs a powerhouse for economic growth. May 11, 2011 special economic zones sezs special economic zones are considered to be growth boosters and employment providers. Special economic zones, locational advantages, sez. Introduction a special economic zone sez is an economic region in a country which is created for the purpose of promoting manufacturing exports and economic development through a wide variety of special exemptions, relating to taxes, quotas, cu. Advantages and disadvantages of special economic zone. A special economic zone or sez is a specially marked territory or enclave within the national borders of a country that has more liberal economic laws than the rest of the country.

Know more about sezs in india through this article. An overview of south african special economic zones 3. In addition to the direct benefit from the injection of new capital into the economy, fdi. Epz or in the other names open economic zone or economic development zone is similarly to ftz in terms special economic zone. The pros and cons posted on january 16, 2015 by the independent in main news the government has announced plans to introduce special economic zones sezs to attract direct investment, alleviate largescale unemployment, develop and diversify the economy. A study on special economic zones sez in tamilnadu state. World investment report chapter 4 special economic zones. Relative advantages and disadvantages of different types of fiscal incentives 28. Some epzs are single factory locations, whereas some, such as the chinese special economic zones, are so large that they have a resident population.