The Special Economic Zone (SEZ) Scheme finally took off in the year 2005 with the passage of the SEZ Bill by the Parliament in May 2005. This new law is aimed at giving stability to domestic and foreign investors in SEZs, thereby creating world-class infrastructure and boosting exports and employment in the country.
The setting up of as many as 71 SEZs has been approved. Of these new SEZs, several have already become operational – namely, Indore multi-product SEZ (Madhya Pradesh); and the following sector-specific SEZs: Manikanchan (West Bengal) – gems & jewellery; Jaipur (Rajasthan) – gems & jewellery; Mahindra City, Chennai (Tamil Nadu) – IT, hardware bio-informatics, apparel and fashion accessories; Salt Lake Electronic City (Kolkata) – software development and IT enabled services; and Jodhpur (Rajasthan) – handicrafts. The Chandigarh SEZ (electronic and IT enabled services) has already been notified and is ready for operation.
In a landmark decision, the year also witnessed the Union Cabinet giving clearance to implementation of the South Asia Free Trade Area (SAFTA) which comes into effect from 1st January, 2006.
SAFTA is aimed at reducing existing tariffs to less than 5% within a stipulated time frame to boost trade among the SAARC member countries. At the same time, sensitive products covering agricultural items, textiles, pharmaceuticals, small-scale industries etc., will be exempt from the trade liberalisation programme.
Among the other important regional trade initiatives was the signing of a Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore in June 2005 covering trade in goods & services, as well as investments. The Agreement came into effect from 1st August, 2005.
Negotiations for the establishment of an FTA are going on with a number of countries which include (i) Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC) comprising Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand; (ii) ASEAN and (iii) Thailand, under the respective Framework Agreements.
Press Information Bureau Government of India
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