SEEPZ to become free trade zone

The SEEPZ representatives complained that they were subjected to many procedural hassles though the units functioned under EPZ and welcomed the concept of FTZ.

The conversion would imply the zone being treated as outside the customs territory of India and removal of licensing restrictions such as value addition and other export obligation stipulations. As long as the unit achieves a positive net foreign exchange position there would be nomonitoring either by customs or by the development commissioner inside the zone. These units will be allowed to source their requirements, raw materials, from both local and foreign markets free of any levies, including excise duties and sales tax if sourced from the local markets.

N L Lakhanpal, Director General Foreign Trade, who accompanied the minister, added that the unit would not be allowed to sell any part of their production in the domestic tariff area except on payment of full import duty.

A K D Jadhav, Development Commissioner, said that in 1998-99 SEEPZ would register a record 25 per cent growth with exports touching Rs 3,200 crore and net foreign exchange earnings exceeding $ 250 million.

“These units will also be allowed to take up warehousing activities for exports," Lakhanpal said. Queried if the government will consider extending free conversion of currency for payment to employees in the FTZs or for import-export activities, Lakhanpal said "the laws of the land will prevail for allcurrency related issues. There will be no dilution in this regard.”

Currently, there are 156 units in SEEPZ, of which around 50 are said to be engaged in processing of gems and diamonds, while the majority of the balance units are engaged in electronic hardware and software activities.

The detailed notification for conversion of EOUs/EPZs to FTZ is expected to be issued by end of the current month. Once announced, the SEEPZ FTZ is expected to compete with Jab’l Ali in Dubai, the FTZs in Singapore and others in the western countries.