19-Jul-2022: Department of Commerce notifies rules for Work from Home for Special Economic Zones

The Department of Commerce has notified a new Rule, namely Rule 43A - Work from Home in Special Economic Zones Rules, 2006 across all Special Economic Zones. The notification was issued on demand from the industry for making a provision for a country wide uniform Work From Home (WFH) policy across all Special Economic Zones. The Department of Commerce thereafter held several rounds of discussions with various stakeholders before firming up the notification.

The notification under Rule 43A provides work from home for following category of employees of a unit in SEZ:

1. Employees of IT/ITeS SEZ units
2. Employees, who are temporarily incapacitated
3. Employees, who are travelling
4. Employees, who are working offsite

As per the new notification, WFH may be extended to maximum 50% of total employees including contractual employees of the unit. There is flexibility granted to Development Commissioner (DC) of SEZs to approve a higher number of employees (more than 50%) for any bona-fide reason to be recorded in writing.

Work From Home is now allowed for a maximum period of one-year. However, same may further be extended for a period of one year at a time by the DC on the request of units. In respect of SEZ units whose employees are already working from home, the notification has provided a transition period of 90 days to seek approval.

SEZ Units will provide equipment and secured connectivity for the purpose of WFH to perform authorized operations of the units and the permission to take out the equipment is co-terminus with the permission granted to an employee.

11-Feb-2022: Operational SEZs

Presently, there are 425 formally approved Special Economic Zones (SEZs) in the country.  As on date, 376 SEZs are notified and 268 SEZs are operational. SEZs are primarily private investment driven initiatives. The delay in setting up of and operationalizing SEZs could be attributed to several reasons including adverse business climate due to changed global economic situation, changes in fiscal incentives, etc.

As per Section 30 of the SEZ Act, 2005, any goods removed from a SEZ to the Domestic Tariff Area (DTA) shall be chargeable to duties of customs including anti-dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975, where applicable, as leviable on such goods when imported.  

8-Dec-2021: Special Economic Zones

Eight Special Economic Zones (SEZs) have been approved for the Agro and Food Processing sector in India.  Out of these 8 SEZs, 7 have been notified and 3 SEZs are operational.  Presently, there is no SEZ for Agro and Food Processing sector in Maharashtra.  Details of Agro and Food Processing SEZs in India is given below:

List of Agro and Food Processing SEZs in India

26-Jul-2021: Kandla becomes first Green SEZ

Kandla SEZ (KASEZ) was awarded IGBC Platinum Rating today. KASEZ is the First Green SEZ to achieve the IGBC Green Cities Platinum Rating for Existing Cities.

The plaque was presented to KASEZ team consisting of Shri Satyadeep Mahapatra, Joint Development Commissioner and Shri Chandan Singh, Appraiser in the presence of senior officials of the Department Commerce and DGFT.

The efforts of KASEZ team were applauded especially noting the fact that this was accomplished in Bhuj region where water conservation and afforestation are critical interventions. This was major achievement and is part of activities envisaged under the commitment of the Government to the Green SEZs Mission as part of celebrations marking India@75 - Azadi ka Amrut Mahotsav.  It may be noted that Government of India working towards ensuring environmentally sustainable development through a series of measures and efforts that encompass many Ministries.

IGBC Platinum rating has been awarded for ‘Green master planning, policy initiatives and implementation of green infrastructure’ by CII’s Indian Green Building Council (IGBC).

The recognition is set to pave way for all the other SEZs in the country to emulate the green initiative and efforts of Kandla SEZ.

23-Jul-2021: Special Economic Zones touch new heights in terms of performance in Exports, Investment and Employment

In various Special Economic Zones (SEZs) across the country, 1096 Nos. of units has been registered during the last three years.

Total 336 numbers of units exited during the last three years. The reason of such winding of operations includes variations in International market conditions, Slowdown of orders, merger of units and COVID-19 pandemic etc.

SEZs set up under SEZ law have largely or generally met their objectives. SEZs have touched new heights in terms of performance in Exports, Investment and Employment viz. Exports of Rs. 22,840 Crore in 2005-06 has increased to Rs. 7,59,524 Crore in 2020-21; Investment of Rs. 4,035.51 Crore in 2005-06 has increased to Rs. 6,17,499 Crore (cumulative basis) by 2020-21 andEmployment provided to 1,34,704 persons in 2005-06 has increased to 23,58,136 persons (cumulative basis) in 2020-21. The fiscal concessions and duty benefits allowed to SEZs are inbuilt into the SEZ Act, 2005 and are consistent with the guidelines for setting up SEZs as the larger economic initiatives of the Government in general. However, there is no  provision to grant additional fiscal incentives at present.

30-Mar-2020: Relaxations provided on compliances to be met by units / developers / co‐developers of SEZs

In view of the sudden outbreak of COVID‐19 pandemic and the nation‐wide lock‐down, most government offices are closed and a few involved in emergency services etc., are functioning with skeletal staff. The Department of Commerce has therefore decided to provide suitable relaxations on compliances to be met by units / developers / co‐developers of Special Economic Zones(SEZs). Such compliances to which the relaxations will apply, include:

• Requirement to file Quarterly Progress Report (QPR) attested by Independent Chartered Engineers by Developers/ Co‐developers
• SOFTEX form to be filed by IT/ITES units
• Filing of Annual Performance Reports (APR) by SEZ units
• Extension of Letter of Approvals (LoA) which may expire, in the cases of:
• Developers/co‐developers who are in the process of developing and operationalising the SEZ;
• units which are likely to complete their 5 year block for NFE assessment;
• Units which are yet to commence operations

Development Commissioners of SEZs have been directed to ensure that no hardship is caused to Developers / Co‐Developer / Units and no punitive action is taken in cases where any compliance is not met during this period impacted by the above disruption. Further, as may be possible, all extensions of LoAs and other compliances may be facilitated through electronic mode in a time‐bound manner. In the cases where it is not possible to grant extension through electronic mode or in cases where a physical meeting is required, Development Commissioners have been asked to ensure that the Developer / Co‐developer / Units do not face any hardship due to such expiry of validity during this period of disruption. Ad‐hoc interim extension / deferment of the expiry date may be granted without prejudice till 30.06.2020 or further instructions of the Department on the matter, whichever is earlier.

20-Mar-2020: Special Economic Zones in the Country

There were 7 Central Government Special Economic Zones (SEZs) and 12 State/Private Sector SEZs prior to the enactment of the SEZ Act, 2005.  In addition, 421 proposals for setting up of SEZs in the country have been accorded formal approval under the SEZ Act, 2005.  Presently, 354 SEZs are notified, out of which 240 SEZs are operational.

However, between 1st April, 2008 and 29th February, 2020, the Board of Approval (BoA) on SEZs on request of SEZ Private Developers, has approved 101 cases of de-notification of SEZs, subject to the refund of all duties and tax benefits availed by the SEZ Private Developer and on receipt of ‘No-objection’ from the concerned State Government.  The reasons given for these request for de-notification include poor market response, lack of demand for SEZ space and change in the fiscal incentive regime for SEZs, etc.

The Government had constituted a Group of eminent persons under the Chairmanship of Shri Baba Kalyani, Chairman M/s. Bharat Forge to study the Special Economic Zone (SEZ) Policy of India on 04.06.2018.  One of the terms of reference for the Group was to make the SEZ Policy WTO compatible. The Group submitted its report to the Government on 19.11.2018.  A number of recommendations of the Group have already been implemented are as follows:

• Review specific exclusions proposed in NFE computation in light of “Make in India” initiative, especially projects of economic importance - The recommendation sought that the status quo prior to 19.09.2018 should be retained. Accordingly, the same was implemented through a suitable amendment to the SEZ Rules in March-2019.
• Sharing of duty exempted assets/ infrastructure between units to be allowed against specific approval – This recommendation was implemented through a suitable Clarification issued on 11.06.2019 for allowing usage of common infrastructure like canteen / data centres etc. among SEZ units against specific approval.
• Inclusion of indigenous goods in NFE computation should be excluded as there is no foreign exchange outflow on procurement of indigenous goods and same is contrary to the objective of NFE and principles followed for EOUs -  The same was implemented through a suitable amendment to the SEZ Rules in March-2019.
• Formalize “de-notification” process for enclaves and delink its present mandatory usage for SEZs purpose only - This recommendation was implemented through a suitable Clarification dated 28.01.2019 issued to all DCs with copy to State/UTs which relaxed the mandatory usage requirement that stipulated that the denotified land shall be used for SEZ purpose only.
• Support to enable servicing of manufacturing zones. Allowing manufacturing enabling services companies e.g. R&D services, engineering design services, logistics service – This recommendation has been implemented through a suitable amendment to Rule 5 of the SEZ rules on 17.12.2019 which rendered all existing and future SEZs as multi-sector SEZs thereby allowing for the co-existence of SEZ units of any sector with any other sector.
• Broad-banding definition of services/allowing multiple services to come together -  This recommendation has been implemented through a suitable amendment to Rule 5 of the SEZ rules on 17.12.2019 which rendered all existing and future SEZs as multi-sector SEZs thereby allowing for the co-existence of SEZ units of any sector with any other sector.
• Review/relax minimum land/built-up area requirement - This recommendation has been implemented through a suitable amendment to Rule 5 of the SEZ rules on 17.12.2019 which relaxed the minimum land area requirement for setting up a multi-sector SEZ from the erstwhile requirement of 500 hectares to 50 hectares.
• Developer should be allowed flexibility to enter into a long term lease agreement with stakeholders in Zones in line with the State policies - This recommendation was implemented through an instruction No. 98 dated 29.08.2019 which relaxed the earlier stipulation of maximum lease period of 30 years to allow flexibility in lease tenure which would be in line with the maximum tenure allowed under the State / Local Government law / regulations.
• The application for constructing minimum built up area by Developer or Co-developer beyond a period of ten years from the date of notification of the Special Economic Zone to be considered by BOA on merits of each case - This recommendation has been implemented through a suitable amendment to Rule 5 of the SEZ rules on 17.12.2019 thereby empowering the Board of Approval to consider proposals for extensions for period beyond earlier stipulated ten years based on the merits of each case.
• Enabling provisions for transfer of approval from one co-developer to other co-developer – This recommendation has been examined and is being implemented through the mechanism of Board of Approvals which examines and approves such proposals on the merits of each case.
• Funding mechanism for last mile connectivity for SEZs -  A mechanism for funding such requirement of last mile connectivity infrastructure has enabled through the existing scheme of TIES which has been clarified through suitable instruction to Development Commissioners in Jan-2020. Besides the following steps have also been taken towards enabling ease of doing business and enhancing flexibility:
• Delegation of powers to Development Commissioner for shifting of SEZ unit from one SEZ to another within their jurisdiction – Earlier such proposals for shifting of SEZ units from one SEZ to another were processed and approved at the level of Commerce Secretary which has now been delegated to the level of jurisdictional Development Commissioners.
• Enable a trust to be considered eligible to set-up a unit in a SEZ, including a unit to be set-up in the International Financial Services Centre (IFSC). This will also provide flexibility to GoI to include any entity that may be required to be notified from time to time to set-up a unit in a SEZ
• Setting up of cafeteria, gymnasium, creche and other similar facilities / amenities allowed to SEZ units – The request of SEZ units to set up facilities such as cafeteria, gymnasium, creche and other similar facilities / amenities were allowed through a suitable Instruction dated 11.06.2019.
• Revised guidelines for Work from Home policy – The revised guidelines were enabled through an amendment to the SEZ Rules in March-2019 to allow for employees of SEZ units to work from home.
• Uniform list of services to SEZ – This provides for a broad list of input services that could be utilized by SEZ units for their day-to-day operations, thereby avoiding the requirement of the units to seek permission of Development Commissioners for each such instance.

18-Feb-2020: Exports from SEZs achieve USD 100 Billion mark

The Special Economic Zones (SEZs) continue to take the lead in expanding the exports for the country. Even in the midst of volatile global economy, SEZs in India have shown resilience and have achieved 100-billion-dollar worth of exports in FY 2019-20,as on 17thFebruary 2020. It may be mentioned that SEZs achieved this land-mark of 100-billion-dollar worth of exports in 2018-19 in full financial year. A comparison of FY 2019-20 vs. 2018-19 upto February 17th is given below:

Exports in INR Terms (In Crores)

Exports in USD Terms (In Millions)

It is observed that while the services segment, constituting majorly of IT &ITeS services was driver of the export growth at 23.69 %.There was almost 4% growth in manufacturing segment also. This reflects overall expansion and interest in SEZs in the country. Number of operational SEZs have grown to 241 as against 235 at the end of FY 2018-19.

Important sectors that saw healthy growth in this financial year include Gems & Jewelry (13.3%), Trading & Logistics (35%), Leather & Footwear (15%), Non-Conventional Energy (47%), Textiles & Garments (17.6%). Petrochemicals constitute a major segment of SEZ exports, however growth was muted in this segment; which may be attributed to softening of global crude prices.

18-Dec-2019: Tripura gets its first SEZ

The Ministry of Commerce and Industry has notified the setting up of the first ever Special Economic Zone (SEZ) in Tripura on December 16, 2019.

The SEZ is being set-up at Paschim Jalefa, Sabroom, South Tripura District, which is 130 km away from Agartala. It will be a Sector Specific Economic Zone for Agro-Based Food Processing.

The estimated investment in the project will be around 1550 Crore. The developer of the SEZ will be Tripura Industrial Development Corporation (TIDC) Ltd. The SEZ is estimated to generate 12,000 skilled jobs. Rubber based industries, textile and Apparel Industries, bamboo and Agri-food Processing Industries will be set-up in the SEZ.

Setting up of the SEZ in Sabroom will open up new avenues to attract private investment considering the proximity of the Chittagong Port and construction of the bridge across Feni River in South Tripura which is underway.

After it is set up, 100 percent Income Tax exemption will be provided on export income for SEZ units under Section 10AA of the Income Tax Act for the first 5 years. Also 50 percent exemption will be provided for the next 5 years and 50 percent of the ploughed back export profit for another 5 years.

28-Feb-2019: Cabinet approves Promulgation of an Ordinance for Amendment to the Special Economic Zones Act, 2005

The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved promulgation of an Ordinance to amend the definition of "person", as defined in sub-section (v) of section 2 of the Special Economic Zones Act, 2005 (28 of2005) to include a trust, to enable the setting up of a unit in a Special Economic Zone by a trust, as also to provide flexibility to the Central Government to include in this definition of a person, any entity that the Central Government may notify from time to time.

Impact: The present provision of the SEZs Act, 2005 do not permit 'trusts' to set up units in SEZs. The amendment will enable a trust to be considered for grant of permission to set up a unit in SEZs. The amendment will also provide flexibility to the Central Government to include in this definition of a person, any entity that the Central Government may notify from time to time. This will facilitate investments in Special Economic Zones.

30-Jun-2022: PM participates in ‘Udyami Bharat’ programme

The Prime Minister, Shri Narendra Modi participated in the ‘Udyami Bharat’ programme today and launched key initiatives like ‘Raising and Accelerating MSME Performance’ (RAMP) scheme, ‘Capacity Building of First-Time MSME Exporters’ (CBFTE) scheme and new features of the ‘Prime Minister’s Employment Generation Programme’ (PMEGP) to ramp up the MSME sector. He also digitally transferred assistance to beneficiaries of PMEGP for 2022-23; announced results of the MSME Idea Hackathon, 2022; distributed National MSME Awards, 2022; and issued Digital Equity Certificates to 75 MSMEs in the Self Reliant India (SRI) Fund. Union Ministers Shri Narayan Rane and Shri Bhanu Pratap Singh Varma, MSME stakeholders from all over the country, and diplomats from various countries were among those present on the occasion.

Addressing the gathering, the Prime Minister said that the efforts of MSME India will be a key driver of AatmaNirbhar Bharat. He said whatever heights the 21st century India will achieve, that will be dependent on the success of the MSME sector. He emphasised that it is important for India’s MSME sector to be strong for increasing India's exports and for India's products to reach new markets. “Our government is taking decisions and making new policies keeping in mind your ability and the immense potential of this sector”, he added. He said that the initiatives launched today and other measures undertaken by the government are linked with the quality and promotion of MSME.

The Prime Minister remarked that when we say MSME, it expands in technical language to Micro Small and Medium Enterprises. But these micro, small and medium enterprises are a huge pillar of India's growth journey. The MSME sector accounts for almost one-third of India's economy. Strengthening the MSME sector is strengthening the entire society, making everyone recipient of the benefits of development. That is why this sector is one of the highest priorities of the government, he said.

To strengthen the MSME sector, in the last eight years, the Prime Minister said, the government has increased the budget allocation for this by more than 650%. “For us, MSME means - Maximum Support to Micro Small and Medium Enterprises”, the Prime Minister stressed.

Noting that more than 11 crore people are connected with the sector, The Prime Minister remarked that MSME is critical for employment generation. During the pandemic, the government decided to save the small enterprises and give them new strength. Under the Emergency Credit Line Guarantee Scheme, the central government has ensured Rs 3.5 lakh crore for MSMEs, he said. As per a report, this resulted in saving about 1.5 crore jobs, the Prime Minister informed. He said that MSME is a major medium for achieving the pledges of ‘Amrit Kaal’ of India’s independence.

Shri Modi recalled a time when earlier governments did not recognize the importance of the sector and shackled the sector by adopting policies that kept the small enterprise small. To address this, the definition of MSME was changed. The Prime Minister said if any industry wants to grow and expand, then the government is not only supporting it but is also making necessary changes in the policies. The Prime Minister pointed out that in GeM, MSME has got a very strong platform to provide goods and services to the government. He asked every MSME to get registered on the GeM portal. Similarly, prohibiting global tenders for projects worth less than 200 crore will also help the MSME.

The Prime Minister said that the government is taking measures to help MSME in increasing exports. The Indian Mission abroad has been told to work on this. The Prime Minister said that the Missions are being evaluated on three parameters i.e. trade, technology and tourism.

The Prime Minister said that Pradhanmantri Rozgar Srijan Karyakram was revamped after 2014 as it was not able to achieve its goals in the period between 2008-2012. Since 2014, more than 40 lakh jobs have been created under this programme. During this period 14 thousand crore rupees worth of margin money subsidy was provided to these enterprises. Cost limit for products falling in this scheme has also been increased, he informed.

Talking about inclusive development, the Prime Minister said that trans-gender entrepreneurs are being provided with all help to realize their goals.

The Prime Minister noted that now for the first time, the turnover of Khadi and Village Industries has crossed Rs 1 lakh crore. “This has been possible because our small entrepreneurs in the villages and our sisters have worked very hard. Khadi sales have increased 4 times in the last 8 years”.

The Prime Minister said that difficulty in getting loans without guarantees was a major obstacle for the vulnerable sections of the society to pursue the path of entrepreneurship.  After 2014, it was decided to enlarge the ambit of entrepreneurship through Sabka Saath, Sabka Vikas, Sabka Vishwas and Sabka Prayas. Mudra Yojana, he said, has a huge role to play in making entrepreneurship easy for every Indian. This scheme of bank loans without guarantee has created a large section of women entrepreneurs, Dalit, backward, tribal entrepreneurs in the country. So far, about Rs 19 lakh crore has been given as a loan under this scheme. Among the borrowers, there are about 7 crore such entrepreneurs, who have started an enterprise for the first time, who have become new entrepreneurs, he added. He also noted that on Udyam Portal too, more than 18 percent of those registered are women entrepreneurs. “This inclusiveness in entrepreneurship, this economic inclusion is social justice in the true sense”, he said.

The Prime Minister concluded by saying “Today, through this program, I assure all my brothers and sisters associated with the MSME sector that the government is committed to making policies that meet your needs and walk pro-actively with you. Every accomplishment of an entrepreneurial India will lead us towards a self-reliant India. I believe in you and in your ability.

Background of the Programme:

‘Udyami Bharat’ is reflective of the continuous commitment of the government, right from day one, to work towards the empowerment of MSMEs. The government has launched several initiatives from time to time like MUDRA Yojana, Emergency Credit Line Guarantee Scheme, Scheme of Fund for Regeneration of Traditional Industries (SFURTI) etc. to provide necessary and timely support to the MSME sector, which has helped benefit crores of people across the country.

‘Raising and Accelerating MSME Performance’ (RAMP) scheme with an outlay of around Rs 6000 crore, aims to scale up the implementation capacity and coverage of MSMEs in the States, with impact enhancement of existing MSME schemes. It will complement the Aatmanirbhar Bharat Abhiyan by fostering innovation, encouraging ideation, incubating new business and entrepreneurship by developing quality standards, improving practices and processes, enhancing market access, deploying technological tools and Industry 4.0 to make MSMEs competitive and self-reliant.

‘Capacity Building of First-Time MSME Exporters’ (CBFTE) scheme aims to encourage MSMEs to offer products and services of international standards for the global market. This will enhance the participation of Indian MSMEs in the global value chain and help them realise their export potential.

New features of the ‘Prime Minister’s Employment Generation Programme’ (PMEGP) include an increase in the maximum project cost to Rs 50 lakhs (from Rs 25 lakhs) for the manufacturing sector and Rs 20 lakhs (from Rs 10 lakhs) in the service sector and inclusion of applicants from Aspirational districts & Transgenders in the Special Category applicants for availing higher subsidies. Also, handholding support is being provided to applicants/entrepreneurs through the engagement of banking, technical & marketing experts.

MSME Idea Hackathon, 2022 was aimed at promoting and supporting the untapped creativity of individuals, promoting the adoption of the latest technologies and innovation among MSMEs. The selected incubatee ideas will be provided funding support of up to Rs. 15 lakhs per approved idea.

National MSME Awards 2022 is a recognition of the contributions of MSMEs, States/UTs, Aspirational Districts and Banks for their outstanding performance in the growth and development of India’s dynamic MSME sector.