Home >Industry >Infotech >More IT firms can now launch SEZs, says Jones Lang LaSalle
Trade minister Anand Sharma on Thursday announced that the mandatory requirement of 10ha of minimum land area for setting up IT/ITES SEZs has been abolished. Photo: Pradeep Gaur/Mint (Pradeep Gaur/Mint)
Trade minister Anand Sharma on Thursday announced that the mandatory requirement of 10ha of minimum land area for setting up IT/ITES SEZs has been abolished. Photo: Pradeep Gaur/Mint
(Pradeep Gaur/Mint)

More IT firms can now launch SEZs, says Jones Lang LaSalle

Developers will now be able to aggregate smaller contiguous land parcels and turn them into SEZs

Bangalore: Smaller information technology (IT) companies will now be able to build their own special economic zones (SEZs) after the government removed restrictions on the minimum land requirement for technology companies that are building such trade zones.

“Previously, only the largest IT players could have their own IT SEZs given the capital required to buy 25 acres land. Developers will now be able to aggregate smaller contiguous land parcels and turn them into SEZs," Ramesh Nair, managing director, west, Jones Lang LaSalle India, said on Friday in a press release.

SEZs enjoy benefits, including exemption from paying customs duty, a tax holiday on export profit for 15 years and exemption from payment of service tax.

In cities such as Chennai and Bangalore, where floor space index (FSI) or the amount of construction permitted for IT parks is as high as 3.25-3.75, an SEZ can now be developed on a land parcel as small as seven acres.

The government has done away with the mandatory requirement of 10ha of minimum land area for setting up IT/ITES SEZs. With immediate effect, the minimum built-up area requirements to be met by SEZ developers will be 100,000 square meters (sq. m) for the seven major cities, 50,000 sq. m for category B cities and only 25,000 sq. m for the remaining cities.

Some IT SEZ developers, who have already met the 100,000 sq. m built-up area criteria can now convert the balance land for residential use. Real estate developers will now be able to divide up their land holdings and allocate smaller parts to IT companies to construct their own IT SEZs.

The change in rules will also allow developers an easier way to exit SEZs, given that the transfer of ownership of SEZ units, including their sale, has now been allowed. Moreover, real estate private equity funds with foreign capital will now be able to invest in smaller deals, encouraging more foreign investment into the sector.

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