As many as 466 models have closed within the final 5 years until FY25 in seven particular financial zones (SEZs) throughout the nation, in line with information shared by the Commerce and Business Ministry in written response to a Lok Sabha query.
This comes in opposition to the backdrop of the US tariffs leading to consecutive months of decline in items exports in September and October.
The official information confirmed that 100 models shut store in FY25 alone, most after FY22 when Covid-19 resulted within the closure of 113 models. The employment in SEZs additionally declined to 31.77 lakh in FY25 in contrast with 31.94 lakh through the earlier monetary yr.
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SEZs get pleasure from varied tax advantages, together with duty-free imports and home procurement and make use of over 31 lakh individuals in varied labour-intensive sectors. SEZs in China grew to become a distinguished engine of development, leading to China’s manufacturing prowess. Nevertheless, this mannequin has not resulted in comparable success for India.
To make certain, exports from the SEZs within the export models over the last 5 years have proven an upward pattern. Exports have doubled to Rs 14.63 lakh crore in FY25 in comparison with Rs 7.59 lakh crore in FY21.
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In the meantime, investments have additionally proven a slight uptick as they picked as much as Rs 7.82 lakh crore in FY25 from Rs 6.17 lakh crore in FY21. This comes whilst SEZs are going through low investments in Analysis and Growth (R&D) and tight competitors from different nations.
The Ministry of Commerce and Business has been engaged on SEZ reforms for the final 3 years and is predicted to announce reforms going ahead.
Responding to a query on potential measures deliberate to help SEZs, the Minister of State for Commerce and Business, Jitin Prasada, mentioned the federal government undertakes varied measures from time-to-time to take away operational challenges in SEZs in session with totally different stakeholders.
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“Such measures, together with coverage initiatives like allowing reverse job work and regulatory adjustments are a steady course of and launched within the administration of SEZs as and when wanted,” Prasada mentioned.
Based on a survey by the Indian Council for Analysis on Worldwide Financial Relations (ICRIER): “A few of the causes behind low FDI in Indian SEZs are the shortage of funding safety agreements, not like nations like Vietnam; unfavourable notion in regards to the SEZs and restricted advertising and marketing and model constructing to deal with these perceptions.”
The ICRIER survey added SEZs have been going through productivity-related challenges. Earlier than 2019, there have been round 500 gems and jewelry models in SEZs. Nevertheless, lately, many gems and jewelry models exited SEZs and through FY22, there have been near 360 gems and jewelry models in Indian SEZs, the report said.
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“Throughout FY21, the share of gems and jewelry in complete exports from SEZs additionally declined to fifteen.7 per cent. That is due to a number of causes, together with higher non-fiscal incentives obtained by companies in different competing nations, withdrawal of fiscal advantages in India, pandemic-related demand and provide disruptions and SEZ-related coverage uncertainties,” the report said.
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