Why in News?
Due to steep U.S. tariffs impacting exports, especially gems & jewellery, a government panel is working on new SEZ norms, including allowing “reverse job work” so SEZ units can supply to the domestic market and remain competitive amid declining profitability.
Description:
SEZs are duty-free, geographically demarcated trade enclaves treated as foreign territory for trade, customs and tariff purposes.
Objective:
- Promote exports
- Attract FDI
- Generate employment
- Develop industrial infrastructure
- Provide stable + business friendly regulatory environment
Historical Timeline:
- 1965 → India’s first SEZ→ Kandla, Gujarat
- 2000 → Formal SEZ policy introduced
- 2005 → SEZ Act passed
- 2006 → SEZ Rules notified → rapid expansion
Administration Structure (3-tier):
- Board of Approval (BoA) – final SEZ approval
- Unit Approval Committee (UAC) – approves units inside SEZ
- Development Commissioner (DC) – day to day operations
Operational Features:
- 100% FDI allowed (mostly automatic route)
- Units must be Net Foreign Exchange Earner over 5 years
- Nearly 276 operational SEZs in India.
| Reverse Job Work Demand (Important term): Meaning: SEZ units want permission to undertake production/processing work for Domestic Tariff Area (DTA) units. Why demand? under-utilised labour & machinery boost productivity offset falling US export orders |
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