The government on 22 June cleared 36 new proposals for setting up special economic zones (SEZs), including a $400 million (Rs1,640 crore) information technology (IT) project of Foxconn India Developers Pvt. Ltd, a subsidiary of global contract manufacturing firm Foxconn, but deferred a decision on Reliance Industries Ltd’s (RIL) Navi Mumbai multi-product project to 12 July.
With this, the country has a total of 339 approved SEZs.
“The state government’s comments (on Navi Mumbai) have come and have been circulated to the board of approval,” said a senior official at the commerce ministry who did not wish to be identified.
SEZs are export-oriented business zones where companies can avail of tax benefits from the government.
The government has already notified 126 SEZs, which, according to latest numbers from the ministry of commerce, has generated an investment of Rs35,145 crore so far.
According to commerce ministry officials, who did not wish to be identified, more than 32,000 people have been employed in the SEZs on regular wages. The SEZs, they added, will employ 100,000 people by December 2007 and their export revenues will cross Rs67,000 crore by the end of 2007-08.
“SEZs had export revenues of Rs34,787 crore in 2006-07 and the government is hopeful that they will cross Rs1 lakh crore in 2008-09,” said the official who requested anonymity. He added that apart from Bihar and the North-Eastern states, SEZs are now being set up all over the country.
Lalit B. Singhal, director general, Export Promotion Council for SEZs, a government body said that the zones would play a critical role in increasing exports, attracting foreign investment and creating employment.
“The scheme is a success is borne out by the kind of interest we have seen from companies in it, since it was launched in 2006. SEZs have also helped people in rural areas increase their income—something they had no way of doing before,” Singhal said.
The government’s SEZ initiative ran into rough weather in early 2007. Following protests in parts of the country by farmers whose land was being acquired by local governments to hand over to companies developing the zones, the government put a temporary freeze on fresh clearances and formal go-aheads for previously approved SEZs. The government first grants an approval and then notifies the zones after the land acquisition is complete.
The Centre subsequently removed the freeze on approvals and notifications, but with strong caveats, including a ceiling on the size of the zones (5,000 hectares).
At Friday’s meeting, the government deferred a decision on a 5,000 hectare multi-product SEZ proposed by Skil Infrastructure Ltd.
This project, meant to be set up in Karnataka, will be taken up for consideration once again if the Foreign Investment Promotion Board clears Skil’s proposal to offload a26% stake to a US-based investor for $500 million.
Among the 36 projects cleared on Friday is West Bengal’s first multi-product SEZ for pharmaceuticals, biotechnology and chemicals, to be developed by Ramky Infrastructure Ltd and located in Midnapore.
Parry Infrastructure Co. Pvt. Ltd’s food processing SEZ in the East Godavari district of Andhra Pradesh has also been cleared, as well as one each for biotechnology and IT in Maharashtra proposed by Uttam Galva Steels Ltd.
In addition, the government has cleared MAS Fabric Park (India) Pvt. Ltd’s proposal for a 235 hectare textile park in Nellore, for which it has already acquired land.
MAS, a Sri Lanka-based company, is expected to invest roughly $700 million in India and create 30,000 jobs.
“This will be a 100% foreign direct investment project,” the official said. The MAS park is likely to launch in the next fiscal and the firm will invest Rs880 crore in the first phase of the zone’s development.
The government also cleared several IT and biotechnology SEZ proposals, including those by Mohan Investments and Properties Pvt. Ltd, Mayar India Ltd (both in Haryana), Zoom Developers Pvt. Ltd (Indore) and Reliance Infocomm (Navi Mumbai).
Five proposals for IT and IT enabled services SEZs, proposed by the Electronics Corp. of Tamil Nadu, have also been approved on Friday.
Raheja Haryana SEZ Developers Pvt. Ltd has also been allowed to set up a 100 acre engineering SEZ in Gurgaon.
The government deferred seven proposals and cleared in-principle only nine others.
Nearly 50 proposals were on the agenda of the board of approval, the government body that approves and notifies SEZs; 45 of these were new, while the rest were carried over from previous meetings.