Commerce Ministry Seeks Input On SEZ Reform Proposals

ENA Economy 2024-07-02 13:40:21 New Delhi, Jul 2 (KNN) The Ministry of Commerce has initiated interdepartmental consultations on a series of proposed measures aimed at revitalising Special Economic Zones (SEZs) and enhancing their interaction with the domestic market, according to a senior ministry official. Key proposals under consideration include allowing SEZ-manufactured products to be sold in the domestic market upon payment of duty foregone on inputs, potentially promoting value addition. The ministry is also exploring a more flexible framework for SEZ product sales in the domestic market and streamlining approval processes for SEZ units. Additionally, there are plans to address issues related to job work, particularly for IT firms seeking domestic market opportunities. The official noted that the primary challenge facing SEZs is the inability to achieve economies of scale, emphasising the need to improve connections between SEZs and the Domestic Tariff Area (DTA). To implement these changes, the commerce ministry has proposed amendments to the SEZ law and has circulated a draft cabinet note for review. Currently, SEZ units are permitted to sell products in the DTA by paying duties on finished goods. The proposed shift to a duty foregone basis for inputs aligns with existing practices under the Manufacturing and Other Operations in Warehouse Regulations (MOOWR) scheme. Despite challenges, SEZ exports grew by over 4 per cent to USD 163.7 billion in fiscal 2024, contrasting with a 3 per cent decline in overall national exports. SEZs contributed more than one-third of India's total exports last fiscal year. As of March 31, 2024, 280 out of 423 government-approved SEZs were operational, with 5,711 units approved as of December 31, 2023. Major export destinations include the UAE, US, UK, Australia, and Singapore. The ministry's reform efforts aim to address longstanding issues and boost the SEZ sector's growth, aligning with Commerce and Industry Minister Piyush Goyal's previous statements on easing certain restrictions for SEZ units. These proposed changes reflect the government's commitment to enhancing the competitiveness and efficiency of SEZs in India's economic landscape. (KNN Bureau) 38434 https://knnindia.co.in/news/newsdetails/economy/commerce-ministry-seeks-input-on-sez-reform-proposals 2024-07-02 13:40:21 knnindia.co.in Commerce Ministry Seeks Input On SEZ Reform Proposals