The government is exploring many steps, including a flexible framework for the domestic sale of products made in special economic zones (SEZs), simple de-notification regulations, and expediting unit approval processes.
The goal is to assist in the revitalization of SEZs and to simplify business transactions between SEZs and domestic tariff areas (DTAs) or the domestic market. SEZs are enclosures that are treated as foreign territories for trade and customs duties, with restrictions on duty-free sales in the domestic market outside of these zones.
The inter-ministerial consultation is moving quickly, and the measure is expected to be submitted during the upcoming Winter session of Parliament, which begins on December 4 and runs until December 22.
The proposed Development of Enterprise and Service Hubs (DESH) bill will be replaced by this amendment bill.
The amended law aims to revitalize SEZs and make business transactions between SEZs and DTAs easier. It suggests allowing duty-free sales from SEZ to DTA, allowing partial zone de-notification, easing notification rules, and simplifying clearance for SEZ units.
In a research, think tank Global Trade Research Initiative (GTRI) advised that the government allow the sale of items manufactured in SEZs on the domestic market in exchange for payment of duty foregone on inputs, as this would assist stimulate value addition. SEZs have developed as a major source of exports for India. In 2022-23, total exports from these zones were USD 155.8 billion. There were USD 61.6 billion in product exports and USD 94.2 billion in service exports.