New Delhi, Jul 3 (KNN)  After approving of industrial parks by China, India has now decided to extend to those parks the same benefits that are extended to special economic zones (SEZ) and national investment and manufacturing zones (NIMZ).

SEZs and NIMZs enjoy several tax related benefits. While the SEZs enjoy 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five years thereafter and 50 per cent of the ploughed back export profit for next five years; NIMZ, under the National Manufacturing Policy, has provisions of tax incentives to small and medium enterprises (SMEs).

The government on June-25 gave in-principle approval for India China industrial parks in the country which hopefully will help the Indian vendors as well.  Thereafter, a MoU was signed for the setting up of such industrial parks.

India has been running a huge trade deficit against China and the imbalance has hit Indian manufacturers, more so the SMEs in several industry segments like electronics, electricals, bicycle parts and telecom hardware.

India's trade deficit with its top trading partner China touching a whopping USD 31.42 billion as the bilateral trade declined by 1.5 per cent in 2013, registering a downward trend for the second consecutive year, reports said.

However, if Chinese industrial parks are set up in India, at least the products to be sold in India would be manufactured in these parks and are likely to involve Indian partners.

According to China India Trade and Investment Centre (CITIC), China is interested in investing in India especially in automotive, electronics, agro-processing, tourism and manufacturing. 

According to interim Secretary General of CITIC Jagat Shah, both sides had identified five states where the parks would be set up - Uttar Pradesh, Andhra Pradesh, Gujarat, Maharashtra and Karnataka.  (KNN/ES)