Rural Infrastructure

Proposal to set up Multiproduct SEZ for Agriculture Sector

Presented by ;

FAROOK A AZAM

Presentation flow

Why this project

Agricultural scenario in INDIA

Karnataka Statistics Snap shot

Need to set up Business unit for Agri Sector

Commodities and Products related to Agriculture and Food Industry

Location considered for project

Project highlights

SEZ Overview

Why this project

• If we want to reach the double digit in our GDP then we need to

concentrate in this project.

• The Agriculture sector is the untapped sector till date.

• The most important is the sustainable development of Rural INDIA

• Agriculture Growth Rate in India GDP has declined over the years. The

Indian government must take steps to boost the agricultural sector for this

in its turn will lead to the growth of Agriculture Growth Rate in India GDP.

Why this project cont....The latest snapshots of the India GDP growth rate are as follows - GDP factor for the first quarter of 2007-08 was at Rs 7,23,132 crore, registering a growth rate of 9.3% over the corresponding quarter of previous year

– India's economy grew at 9.3% in quarter April-June and it was driven by manufacturing, construction and services sector and agriculture sector

– The annual inflation rate was 4.45% for the week ended July 28, 2007 – India's Balance of Payments is expected to remain comfortable – Merchandise Exports recorded strong growth – Manufacturing registered 11.95 growth – The passenger vehicles sector grew by 11.61% during April-May 2007 – Electricity, gas & water supply performed well and recorded an impressive growth rate of 8.3% – Construction growth rate rose to 10.7% – Trade, hotels, transport and communication registered a growth rate of 12% – Financing, insurance, real estate and business services recorded an impressive growth rate of

at 11% during the 1st quarter of this fiscal year 2007 – Community, social and personal services maintained a decent growth rate of 7.6%

– The growth rate of agriculture, forestry & fishing' and 'mining & quarrying' are estimated at 3.8 %, and 3.2 %, respectively during the 1st quarter of 2007-2008

– Exports grew by 18.11% during the 1st quarter of 2007-2008 and the imports shoot up by 34.30% during the same period

– India's FOREX reserves (excluding Gold and SDRs) stood at $219.75 billion at the end of July ' 07

– The food sector is estimated to be of US$ 200 billion and it is expected to grow to $310 billion by 2015 Stocks of food-grains grew by 13.1% to 17.73 million tonnes

Agriculture scenario in INDIA

The growth rate of India GDP is 9.4% in 2006- 2007. The agricultural sector has always been an

important contributor to the India GDP. This is due to the fact that the country is mainly

based on the agriculture sector and employs around 60% of the total workforce in India.

The agricultural sector contributed around 18.6% to India GDP in 2005.

The agricultural yield increased in India after independence but in the last few years it has

decreased. This in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. The

total production of food grain was 212 million tonnes in 2001- 2002 and the next year it declined to

174.2 million tonnes. Agriculture Growth Rate in India GDP declined by 5.2% in 2002- 2003. The

Growth Rate of the Agriculture Sector in India GDP grew at the rate of 1.7% each year between

2001- 2002 and 2003- 2004. This shows that Agriculture Growth Rate in India GDP has grown very

slowly in the last few years.

The agricultural sector has had low production due to a number of factors such as

illiteracy, insufficient finance, and inadequate marketing of agricultural products.

Further the reasons for the decline in Agriculture Growth Rate in India GDP are that in

the sector the average size of the farms is very small which in turn has resulted in low

productivity. Also the Growth Rate of the Agricultural Sector in India GDP has declined

due to the fact that the sector has not adopted modern technology and agricultural

practices. Agriculture Growth Rate in India GDP has also decreased due to the fact that

the sector has insufficient irrigation facilities. As a result of this the farmers are

dependent on rainfall, which is however very unpredictable.

Agricultural Sector contribution to GDP

India gross domestic product (GDP) means the total value of all the services and goods that are

manufactured within the territory of the nation within the specified period of time. The economy of

India is the twelfth biggest in comparison to that of others in the whole world, for it has the GDP of

US$ 1.09 trillion in 2007. The country has the second fastest major growing economy in the whole

world with the GDP growing at the rate of 9.4% in 2006- 2007.

The composition of Indian GDP includes many sectors like industry, infrastructure, agriculture, and

services. The percentage of the share of these sectors in the composition of India GDP differs and also

has changed over the years. India GDP Composition Sector Wise was that the agriculture

sector contributed around 32%, services sector contributed 41%, and the industry sector

contributed 27% in 1990- 1991.

The agriculture sector contributed the most to India GDP after the independence of the

country. This sector contributed to India GDP around 18.6% in 2005. The contribution of

the agriculture sector has gone down in India GDP in the last few years but in spite of this

the sector remains the largest economic sector in India.

Karnataka statistics snap shot cont..

Karnataka statistics snap shot cont..

How to resolve the GAP ?

Agriculture Growth Rate in India GDP has

declined over the years. The Indian

government must take steps to boost the

agricultural sector for this in its turn will

lead to the growth of Agriculture Growth

Rate in India GDP.

Need of Business unit setup for Agro sector

• For work units, such as clothing, toys, paper conversion, change packaging

and specialty packaging, value-added in agriculture and cultivation of

plants Horticulture.

• spices, rubber, coconut and arecanut based products

• Production units specialized in all entries to the Indian cuisine as masalas,

finished preparations of dried vegetables, ingredients for and entrances,

maize, sugar, rice and rice, wheat, potatoes and onions, vegetables dried

and other processed foods and be considered

Commodities and Products related to Agriculture and Food

Industry

Commodities related to the Agriculture and Food Industry

• Animal & Animal Products– Buffalo Meat– Eggs– Livestock

• Animal Feed• Bakery and Confectionery• Beverages

– Alcoholic Beverages– Coffee– Soft Drinks– Tea– Wine

• Cereals– Barley– Maize– Pulses– Rice– Wheat

• Dry Fruits– Almonds– Cashew– Coconut– Peanuts– Walnut

• Dye & Colours• Plant Products

– Flowers– Mango– Sugarcane– Tobacco– Fruits and Vegetables

• Processed Foods– Ice-cream– Pickles

• Seeds– Cocoa– Vegetable Seeds

Commodities related to the Agriculture and Food Industry

contd...• Spices

– Asafoetida– Basil– Bay leaves– Bishop's Weed– Cardamom (small)– Cardamom (large)– Cassia– Celery– Chilly– Coriander– Cumin– Curry leaf– Dill– Fennel– Fenugreek

– Garlic– Ginger– Galanga– Kokam– Mustard– Pepper– Poppy– Saffron– Tamarind– Turmeric– Vanilla

Products related to the Agriculture and Food Industry

• Bakery & Confectionery ProductsBakery, Biscuits, Chocolate Chip, Chocolates, Cocoa, Confectionaries, Confectionery,

Cookies, Deoiled Cake, Drinking Chocolates, Bread, Cakes, Malted Foods, Sweets,

Pastry, Toffees

• Cattle Feed SupplementsCattle Feed, Animal Feed, Animal Feeding Stuffs, Fodder

• Child Care & Nursery ProductsBaby Care Products , Baby Feeding Products

• Dry Fruits & NutsDry fruits, Cashew Kernels , Cashew Nut, Cashews, Almonds, Roasted Dry Fruits,

Peanuts, Groundnut, Walnut Kernels, Walnuts, Indian Peanuts, HPS Groundnuts

• Dyes & Color AdditivesAZO Dyes, Bleaching Machinery, Colours, Color Additives, Colour Additives, Cottex

Dyeing, Dye intermediates, Dye Makers, Dyes, Dyestuffs, Cationic Dyestufs, Acid Dyes,

Reactive Dyes, Pigments, Fabric Dyeing, Textile Dyeing, Vet Dye

Products related to the Agriculture and Food Industry

cont..• Edible Oil & Allied Products

Coconut Oil, Cooking Fats, Cooking Oil, Cumin Seed Oil, Edible Oil , Castor Oil , CelerySeed Oil , Ajowan Oil , Margarine Oil , Refined Oil , Refined Vegetable Oil , Rice Bran Oil ,Sesame Oil , Sunflower Oil , Mustard Oil , Groundnut Oil , Herb Oil, Vanaspathi Ghee,Vegetable Oil , Vegetable Oil , Oil Products, Table Margarine

• Fertilizers

Bio Fertilizers, Chemical Fertilizers, Agriculture Fertilzers, Natural Fertilizers, Nonhazardous

Bio Fertilizers, Non-toxic Fertilizers, Organic Fertilizers, Organic Manure,Fertiliser Mixtures, Fertilisers, Fertilizer Mixtures, Fertilizers, Urea Fertilizers

• Flowers, Floriculture & Dried Flowers

Dried Floral Items , Dried Flowers , Dry Flower , Bouquets, Cane Flowers , Lotus Pods ,shola Flowers , Palm Leaf , Floriculture, Flowers, Foliage, Handmade Flowers

Products related to the Agriculture and Food Industry

cont..• Food Processing Plants, Machinery & Equipment

Bakery Equipment, Dairy Equipments, Dairy Farms Equipment, Food Grain Machine,Food Processing Equipment, Frying System, Spray Dryers

• Fresh, Dried, Preserved & Dehydrated Fruits and Vegetables

Bananas Dried , Bananas Fresh , Beans, Cherry, Cucumbers, Dried Fruits , DriedTruffles , Dried Vegetables , Carrots, Lemon, Mandarins, Mangosteens, Meslin, Shallots,Spinach, Mixed Vegetables , Mushroom, Mushroom Spawn , Oranges Fresh , Papaya,Pineapple, Potatoes Fresh , Preserved Fruits , Preserved Vegetables , Radiata Dried,Fresh Apples , Fresh Asparagus , Fresh Fruits , Fresh Grapes , Fresh Oranges , FreshVegetables , Gherkins, Grapes, Fresh Turnips

• Liquors, Mineral Water & Beverages

Beverages, Bewerages, Brandy, Aerated Water , Aerated Waters , Alcoholic Beverage ,Liquors, Rum, Sandpiper, Schweppes, Soft Drinks , Spring Water , Mineral Water , FatLiquors , Gin, Vodka, Whisky, Wine, Indian Liquor, Indian Wine

• Marine Food Supplies

Dried Beche-de-mer, Dry Fish, Aqua Foods, Marine Food, Marine Products, SeaCucumber, Sea Food, Shrimps, Prawns, Frozen Marine Products, IQF

Products related to the Agriculture and Food Industry

cont..• Meat & Poultry Food

Bacon, Egg, Livestock, Lyoners, Meat, Mortadella, Peppero, Poultry Feed , Poultry Food ,Frozen Meats , Ham

• Milk & Dairy ProductsCheese Spread , Condensed Milk , Curd , Dairy Products , Dairy Whitener , Dry Yeast,Butter, Cheese, Ice Cream , Ice Cream Corns , Shrikhand, Milk, Milk Cans , Milk Powder ,Milk Products , Paneer, Extract Powder , Flavoured Milk , Yeast

• Natural Dried, Live and Grafted PlantsLive Plants , Natural Dried Plants , Natural Plants grafted Plants

• Other Miscellaneous Agro ProductsBajra, Barley, Dried Marine Products , Cane, Jaggery, Agro Commodities , Agro Product ,Jaggery Powder , Sorbitol, Soya Meals , Starch, Sugar, Namkeens, Natural Honey ,Onions, Papad, Flour, Foodstuffs, Glucose, Gluten, Groundnuts, Honey

Products related to the Agriculture and Food Industry

cont..• Pet-Use Products, Feeds, Pet Furniture & Allied Products

Dog Biscuits , Raw Hide Bones , Pet Feeds , Pet Products , Pet-Use Products ,Equestarian Goods , Equestarian Harness

• Pickles, Chutneys, Ketchups & SaucesChilly sauce , Chutney, Chutnies, Ketchups, Lemon Pickles , Mango Pickles , Sauces,Soya Sauce , Synth Vinegar , Mustard Sauce , Pepper Sauce , Pickles, Garlic Sauce ,Tomato Ketchups , Tomato Sauce

• Processed Food & SnacksCanned Fish , Canned Food , Malt Extract , Snacks, Soup, Soup Concentrate , SoupPowder , Porridge, Potato Wafers , Processed Chicken , Processed Foods , ProcessedSeafoods , Processed Snacks , Fish & Sea Food , Frozen Fish , Frozen Meat , FrozenShrimps

• Rice, Wheat, Pulses & Other Food GrainsCereals, Maida, Maize, Rice, Rice Bran Extractions , Rice Mill Machinery ,

Sorghum,Soymeal, Suji, Parmal, Pulses, Wheat Flour, Wheat Machinery

Products related to the Agriculture and Food Industry

cont..• Seeds, Buds, Plantation & Related Products

Basil Seed , Cumin seeds , Dill Seed , Buds, Cellery Seed , Hybrid Seeds , Seeds,Sesame Seeds , Sesbania Seed , Sunflower Seeds , Mustard Seeds , Oil Seeds , PlantProducts , Plantation, Plants, Psyllium Seed , Fennel Seed , Fenugreek Seed , HerbSeeds , Tamarind Seed , Vegetable Seeds

• Spices & DerivativesBlack Pepper , Chilli Powder , Chillies, Cinnamon, Cloves, Coriander Powder , Cumin,Curry Powders , Dry Ginger , Dry Red Chilly , Elaichi, Cardamom, Chat Masala , Chatni,Anise, Indian Spices , , Salt, Spices, Spices From India, Onion Powder , PepperFenugreek , Seeds, Garam Masala , Ginger, Hot Spices , Turmeric, Turmeric Powder

• Tea & CoffeeBlack Tea , Coffee, Coffee Beans , Darjeeling Teas , Assam Teas , Indian Tea , InstantCoffee , Leaf Coffee , Leaf Tea, Packaged Tea , Green Tea , Tea , Tea Bags, CTC Teas

• Tobacco & Tobacco ProductsBeedi, Betalnut Leaves , Betalnut Supari , Bidi, Bidi Leaves , Chewing Tobacco ,Cigarettes, Arecanut, Jarda, Scented Tobacco , Smoking Items , Smokking Tobbacco ,Snuff, Supari, Opium, Pan, Chatni, Pan Masala , Pan Parag , Tobbacco, TobbaccoProducts , Tulsi Mix , Gutkazarda, Tulsi Zarda , Tobacco, Zafrani Zarda

AGRI Industries are considered an extended arm of agriculture but in India they have not received as much attention as agriculture.

While agriculture contributes about 25 per cent of India's GDP the value added by the processing industry is only 8 per cent of total food production.

For example, only two per cent of horticulture products are estimated to be processed and more than 30 per cent of production is wasted due to lack of storage and processing facilities.

Agri industries help strengthen the farm sector and stabilize rural

incomes

The private sector is yet to realize the full potential of agro

industries. The global market is enormous for sugar, coffee, tea

and processed foods such as sauce, jelly and honey.

The market for processed meat, spices and fruits is equally large.

Only with mass production aided by modern technology

and intensive marketing can the domestic market as well

as the export market be exploited to the fullest extent.

If only one would spend a few hours in the food section of

the Wal-Mart departmental store, one would understand the

depth and width of the market for processed foods.

Most of the foods on the shelves are imported from Latin

American and European countries. The position is the same

in Singapore, London or New York.

Huge domestic market

Even before exploring the opportunities abroad, one has to look

within the country.

The size of the Indian food market is Rs. 350,000 crores.

An average Indian spends around 53 per cent of his/her income

on food.

The domestic market for processed foods is not only huge but

is growing fast in tandem with the economy and an equally

attractive export market .

Processed Foods

Agri industries help in processing agricultural products such

as field crops, tree crops, livestock and fisheries and

converting them to edible and other usable forms.

Edible products otherwise known as processed foods form a

predominant segment.

Multiple Benefits The focus on value addition in the agriculture sector is vital

for comprehensive development of the rural economy.

Since the food processing industry creates jobs, demand for

agri raw materials, leads to diversification and

commercialization of agriculture, enhancing the incomes of

farmers and creating surpluses for export of agro foods.

The broad-based development of the food processing

industry will improve both the social and physical

infrastructure of rural India.

“A study by McKinsey reiterates the

importance of the food sector in India. It

indicates that food in India has an economic

multiplier of 2-2.5. That is for every rupee

of revenue from food, the economy at large

gets Rs. 2-2.50. “

Location Considered for the project

Mandya district

Hasan district

Tumkur district

Why these 3 districts• All the three are connected with National highways i.e. (NH-48 and

NH-4)

• All the three are well connected with Rail link

• Hassan district is having airstrip

• The cheap and well educated manpower available

• Number of Educational Institutions, polytechnics , Engineering

colleges and Technical training institutes

• All the three are having well irrigated land

• The agricultural output is good when compare to other districts in

the state

• Favourable weather condition

• Favourable State Govt . Policies till date

• Situated midway to Mangalore and Bangalore

Highlight of Project • Providing High end infrastructure for agro industries in SEZ, like roads, structure , parking lots and

weighing bridges cranes etc

• Services like power, 100 % power back up, treatment plants, HVAC system, CCTV in common areas,

BMS.

• More than 50 thousand direct employment will be created and indirect employment more than 1.5

lakh.

• Amenities like Convention Halls, Business hotels & auditoriums , Hotel for refreshments, Health clubs

etc

• operation and maintenance of entire Infrastructure with in the SEZ, Security in the open space and

common areas will be done by the developers

• Going to rope all the farmers to enjoy the benefits of the project to the max.

• Hospitals

• Creating a Marketing Block for the Agricultural products and sales

* Conditions apply

SEZ – An Overview

Overview

• Introduced by erstwhile Export Import Policy in April 2000 to provide internationally

competitive and conducive environment for exports

• Various fiscal/ non fiscal incentives/ benefits provided to developer and units in SEZ

• Earlier controlled by Foreign Trade Policy and Customs Act, 1962 and regulations

notified there under

• Special Economic Zone Act (‘SEZ Act’) enacted in 2005 to provide comprehensive

legislation in relation to SEZs

• SEZ – deemed to be territory outside the Customs territory of India in relation to

authorized operation

• Can be set up by private / public / joint sector or State Government or its agencies, for

manufacture of goods or rendering of services or both or as a Free Trade Warehousing

Zone

• Goods and services going into the SEZ from DTA treated as exports and goods and

services coming from the SEZ to DTA treated as imports• SEZ deemed to be a airport, port, inland container depot, land customs station under

the Customs Act

Legislative Framework

SEZ Act 2005SEZ Act 2005 SEZ Rules, 2006SEZ Rules, 2006

• Basic framework for setting up and operation of SEZs prescribed under the Act

• Rules lays down guidelines for giving effect to the SEZ scheme prescribed under the Act

SEZ Rules, 2006SEZ Rules, 2006SEZ Act, 2005SEZ Act, 2005

State SEZ PolicyState SEZ Policy

• Lays down guidelines for giving effect to the SEZ scheme prescribed under SEZ Act, 2005

• Policy provides for substantive and procedural benefits offered by the State to Developer/ Units

State SEZ PoliciesState SEZ Policies

SEZ Act, 2005 & SEZ Rules, 2006 notified on 10 February 2006

Legislative Framework

• Chapter X-A of the Customs Act along with the SEZ Rules 2003 and SEZ (Customs Procedure) has been rescinded with effect from 10 February 2006

• All the rules and notification under other laws in relation to the SEZ shall remain in force to the extent they are not inconsistent with the SEZ Act 2005 and Rules made there under

• Provisions of the SEZ Act, 2005 override inconsistent provisions of any other law in force at the time of commencement of the SEZ Act, 2005

SEZ Act specifies exemption for the developer and units in the SEZ from Customs, Excise, Service Tax, Central Sales Tax etc. However, it is not clear as to whether this would require specific notification under the respective legislations, or whether the specific exemption provided under SEZ Act would suffice

Key Stakeholders

Key Stakeholders

DeveloperDeveloper

• Person who obtains Letter of Approval from the Central Government to establish the SEZ and undertake authorised operations

• SEZ Act also envisages ‘multiple developers’ for the SEZ. When one Developer does not possess minimum contiguous land to develop an SEZ, Central Government may approve more than one Developer

• Co-developer is a person who intends to provide infrastructural facilities in an SEZ along with a developer

• Co-developer enters into an agreement with Developer and obtain requisite permission as per the SEZ Act and Rules

Co-DeveloperCo-Developer

Key Stakeholders

• Contractor can be appointed by developer / co-developer to undertake authorized operations in SEZ

• Contractor can avail all exemptions, drawbacks and concessions available to the Developer / co-developer

• All documents shall bear the name of developer/ co-developer along with the contractor

SEZ UnitsSEZ Units

Units in SEZ can undertake

• Manufacturing• Rendering of services • Trading • Warehousing

In relation to authorized operation of the SEZ

Units in SEZ can undertake

• Manufacturing• Rendering of services • Trading • Warehousing

In relation to authorized operation of the SEZ

ContractorContractor

Key Regulators

Considers proposals for setting up SEZ and Units in SEZ

Considers proposals for setting up of Units in SEZ, monitoring performance, and supervises import / procurement by Developer/ Units in SEZ

Development Commissioner

Board of Approval

For administrative control of the SEZ

Approval Committee

Key Regulators

SEZ Authority

State Government

Receives and forwards the proposal with recommendations to the Board of Approval

Overall authority for governing, notifying the SEZ and granting the letter of approval

Central Government

Undertakes measures for the development, operation and management of the SEZ

Benefits Available

Available to Developer Available to Suppliers

Central Benefits• Customs• Other Miscellaneous Taxes and

Levies• Income Tax• Dividend Distribution Tax• Minimum Alternate Tax

State Benefits• Electricity• Labour

Central Benefits• Central Excise• Service Tax• Central Sales Tax• Drawback/ DEPB

State Benefits• Sales Tax/ VAT• Entry Tax/ Octroi

Incentives and facilities offered to the SEZs

• The incentives and facilities offered to the units in SEZs for attracting investments into

the SEZs, including foreign investment include:-

• Duty free import/domestic procurement of goods for development, operation and

maintenance of SEZ units

• 100% Income Tax exemption on export income for SEZ units under Section 10AA of the

Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the

ploughed back export profit for next 5 years.

• Exemption from minimum alternate tax under section 115JB of the Income Tax Act.

• External commercial borrowing by SEZ units up to US $ 500 million in a year without any

maturity restriction through recognized banking channels.

• Exemption from Central Sales Tax.

• Exemption from Service Tax.

• Single window clearance for Central and State level approvals.

• Exemption from State sales tax and other levies as extended by the respective State

Governments.  

* Source from www.sezindia.gov.in

Benefits Available (Contd.)

• Under the provisions of the SEZ Act, 2005 and the SEZ Rules, 2006

exemptions are made available to Developer/ Unit and to their suppliers.

• The SEZ Rules, 2006 provide that state governments ‘shall endeavor’ to

provide exemptions/ concessions with respect to sales tax/ VAT,

electricity duty etc

• The exemption/ concession has to be refunded by developer if-

– Developer does not utilise the goods or services for authorised

operations

– Unable to duly account for the goods and services for authorised

operations

• Duty drawback or any other export entitlement on DTA supplies to be paid

back by the developer in case of destruction of goods in a natural calamity

– Not required where payment made in foreign exchange

Exemption from payment of taxes, duties or cess on any export or import of goods or services from the SEZ or on procurement of goods or services from the DTA, under the following legislations-

- Agricultural Produce Cess Act, 1940

- Coffee Act, 1942

- Mica Mines Labour Welfare Fund Act, 1946

- Rubber Act, 1947

- Tea Act, 1953

- Salt Cess Act, 1953

- Medicinal and Toilet Preparations (Excise Duties) Act, 1955

- Additional Duties of Excise (Goods of Special Importance) Act, 1957

- Sugar (Regulation of Production) Act, 1961

- Textiles Committee Act, 1963

- Produce Cess Act, 1966

- Marine Products Export Development Authority Act, 1972

- Coal Mines (Conservation and Development Act, 1974

- Oil Industry (Development) Act, 1974

- Tobacco Cess Act, 1975.

- Additional Duties of Excise (Textile and Textile Articles) Act, 1978

- Sugar Cess Act, 1982

- Jute Manufactures Cess Act, 1983

- Agricultural and Processed Food Products Export Cess Act, 1985.

- Spices Cess Act, 1986

- Research and Development Cess Act, 1986

Miscellaneous Benefits – Central Laws

Setting up of SEZ Basic Concepts

Key Concepts

Infrastructural Facilities

Infrastructural Facilities

Infrastructure facilities means industrial, commercial or social infrastructure or other facilities necessary for the development of a Special Economic Zone or such other facilities which may be prescribed

Infrastructure facilities means industrial, commercial or social infrastructure or other facilities necessary for the development of a Special Economic Zone or such other facilities which may be prescribed

InfrastructureInfrastructure

Infrastructure means facilities needed for development, operation and maintenance of a Special Economic Zone and includes industrial, business and social amenities like development of land, roads, buildings, sewerage and effluent treatment facilities, solid waste management facilities, port, including jetties, single point moorings, storage tanks and interconnecting pipelines for liquids and gases, Inland Container Depot or Container Freight Station, warehouses, airports, railways, transport system, generation and distribution of power, gas and other forms of energy, telecommunication, data transmission network, information technology network, hospitals, hotels, educational institutions, leisure, recreational and entertainment facilities, residential and business complex, water supply, including desalination plant, sanitation facility

Infrastructure means facilities needed for development, operation and maintenance of a Special Economic Zone and includes industrial, business and social amenities like development of land, roads, buildings, sewerage and effluent treatment facilities, solid waste management facilities, port, including jetties, single point moorings, storage tanks and interconnecting pipelines for liquids and gases, Inland Container Depot or Container Freight Station, warehouses, airports, railways, transport system, generation and distribution of power, gas and other forms of energy, telecommunication, data transmission network, information technology network, hospitals, hotels, educational institutions, leisure, recreational and entertainment facilities, residential and business complex, water supply, including desalination plant, sanitation facility

Role of Developer

Role of the Developer

Developer required to undertake authorised operations in relation to –

Development of SEZ: Creation of infrastructure (such as roads, ports, electricity, water, etc.) and allocation of space / built up area for setting up and operating UnitsDevelopment of SEZ: Creation of infrastructure (such as roads, ports, electricity, water, etc.) and allocation of space / built up area for setting up and operating Units

Operation and Maintenance of SEZ: Day to day operation and maintenance of the SEZ and providing infrastructure facility to the Units set up in the SEZ to ensure their smooth functioning

Operation and Maintenance of SEZ: Day to day operation and maintenance of the SEZ and providing infrastructure facility to the Units set up in the SEZ to ensure their smooth functioning

• Authorized operations not defined in SEZ Act or Rules

Mainly role of Developer is to undertake development, operation and maintenance of infrastructure and provision of infrastructure facilities

Approval Criteria

49

Who can be a SEZ developer

• SEZ can be set up jointly or severally by

– Central Government

– State government

– Any person (incl. Private / Public limited Company,

Partnership or Proprietorship)

Section 3(1)

Approval Criteria – Applicant

Authorised OperationsAuthorised Operations • Comprehensive

Approval Criteria – Multi product SEZ

SizeSize

• Minimum contiguous area of 1,000

hectares (200 hectares in specified states) • Exclusive SEZ for Services to have a

minimum contiguous area of 100 hectares

Processing AreaProcessing Area • Minimum 25% of SEZ area to be demarcated

as processing area

51

Authorised OperationsAuthorised Operations

Indicative Sectors- Engineering, textile/ garments, pharmaceuticals/ chemicals, handicrafts, gems & jewellery, electronic hardware and software (incl. ITES), bio tech and non conventional energy

Approval Criteria – Sector specific SEZ

SizeSize

Processing AreaProcessing Area • Minimum 50% area for processing area (for export related

activities)

• Minimum contiguous area of 100 hectares (50 hectares in specified states)

• Electronic hardware and software including ITES – 10 hectares with min. built up processing area of 100,000 sq. meters

• Bio tech, Non conventional energy (incl. solar energy equipment) and Gems & Jewellery sector – 10 hectares

Authorised OperationsAuthorised Operations Primarily trading and warehousing activities

Approval Criteria – Free Trade & Warehousing Zone

SizeSize

Processing AreaProcessing Area Not specified however minimum built up area should be 100,000 sq meters

• Minimum 40 hectares • No minimum area limit for setting up the

SEZ• Maximum area not to exceed 20 percent of

processing area

Approval Criteria

• Area identified for SEZ to be contiguous and vacant with no public thoroughfare

(BOA may approve otherwise on a case to case on merits in case of Multi Product SEZ only)

Term ‘contiguous’ not defined under the SEZ Act, 2005 or SEZ Rules, 2006

Concise Oxford English Dictionary defines contiguous to mean- ‘sharing a common border; next or together in sequence’

• Additional area can be included in the existing SEZ. Minimum area of additional area not specified

Approval Process

Application to State Government or Board of Approval (BOA)

Section 3(2) & 3(3)/ Rule 3

Approval Process

Forwards proposal to BOA with recommendations within 45 days of receipt of proposal

Section 3(6) and Rule 4

BOA approves proposal subject to such terms and conditions as it may specifySection3(7) & 3(9) / Rule 5

Approval Communicates to the Central Government

In case proposal is directly submitted to BOA, applicant to obtain concurrence of the State Government within 6 months of

approval by BOA (Rule 4)

State Government

Applicant*

Board of Approval

2

1 1

3

ModificationCommunicates to the

applicant

RejectionCommunicates the reasons to Central Government which shall

intimate the same to the applicant

*Applicant refers to applicant for the development of SEZ other than Central or State Government

4 Cont…

Approaches DC for demarcation of

Processing / Non Processing Area

Applies to Approval Committee for permission of

procurement items

Submit details of proposed operations

Approves authorized operations

Board of Approval

Ministry of Commerce grants a Letter of Approval (LOA) to DeveloperSection 4 / Rule 6

Central Government

Submit details of identified area to

Ministry of Commerce

Developer

Notification of SEZ by Central Government

(Ministry of Commerce)

4

5a5b

6

7b

Approval Process – Post LOA

Developer

On agreement with Developers, to apply for an LOA

Co-Developer

7a

8b Cont…8a Cont…

Approves import and procurement of goodsRule 10

Approval Committee8a

Approval Process – Post Notification

Demarcates Processing / Non Processing AreaRule 11

DC8b

9Obtains IEC and executes Bond cum-Legal Undertaking and follows General

Conditions of importRule 12 & 14

Developer

Avails duty concession on import / procurement and commence operation

Developer

For details refer to Annexure 3

Approval Process – Co-developer

Action steps for Co-developer • Enters into an agreement with developer to provide infrastructure facilities or

undertake authorized operations in SEZ• Approaches BOA to seek approval for status as a Co-developer • Follows the procedure of approval as applicable to developer to obtain LOA

from Central Government (Ministry of Commerce)• However, state government recommendations not required

Developer may specify the requirement of Co-developer at the proposal stage.

Although SEZ Act and Rules are silent on this aspect, specifying co-developers

requirement at proposal stage may expedite the process of obtaining LOA for

co-developer at a later stage

Initiative

Community attitude

Cleaner & greener facilities

Cleaner & greener facilities

Labor safety & medical care

Cleaner & greener facilities

Zero tolerance for pollution

Maintain natural resources

Creating opportunity for local people

For successful sustainable development

Thank You