TS, AP lucky to get more export opportunities despite global challenges, says Indo-American Chamber of commerce Industrialists urge TS, Centre to cut red tape in SEZs

Industry representatives have suggested Telangana Government and Centre to ease out procedural hurdles and refund mechanism in forthcoming revival policy of Special Economic Zones (SEZs). Telangana Industries Department, along with other states, have been working on the revival of SEZs and a new policy from the Centre in this regard is expected soon.

The focus areas of the policy will be employment generation and manufacturing activity, while addressing previous issues that made majority of SEZs non-functional.

Despite challenging global business dynamics, several opportunities are coming up for exporters in Telangana and Andhra Pradesh, according to IndoAmerican Chamber of Commerce (IACC).

“Telangana Government is positive on promoting SEZs in the state. SEZ policy from the Centre will be announced very soon. In this regard, Union Commerce Ministry has constituted a high- level panel on SEZs. Different issues such as how to make SEZs more competitive, more employment generation etc. are under consideration with a focus on forming SEZs.

Service industry is a major beneficiary of SEZ policy and it delivered expected performance too. But service sector is restricted to urban areas only. Global companies are looking towards India, which is a big consumer market. Both the Telugu states can produce quality products at competitive price. We have to tap this potential to take on Chinese competition in the global market. Strategically, tapping local market and exporting as well,” observed Srikant Badiga, president of Telangana State and Andhra Pradesh Chapters of IACC.

Badiga is also one of the seven members of the revival committee on SEZs and the president of SEZ Association of Andhra Pradesh and Telangana.

“Attracting foreign investments will be another priority area for us. Thailand and other African countries are opening up SEZs, by offering financial incentives. However, Telangana and AP have their own edge. We have to look at two sides of the coin. We need to understand that government brings out policy only and doesn’t involve in business,” Badiga said.

Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry (FTAPCCI) has suggested Telangana Government to focus on procedural simplification.

Its president Arun Luharuka said: “SEZ does not mean just mere allocation of land. It should provide comprehensive infrastructure needed for foreign trade. We request Telangana Government to take care of refund mechanism for exporters.”

Out of the 64 SEZs in Telangana, TSIIC promoted seven and forged joint ventures for three SEZs. 26 SEZs are under private developers and rest under urban development authorities, among others.

“Several SEZs are nonfunctional due to technical reasons. In Tada area in Andhra Pradesh, there are two SEZs- one promoted by APIIC and another by Sri City. The latter one is a success story. Regional dynamics and infrastructure are same for both the SEZs. It is intent that matters a lot. SEZ Act is an enabling Act and extends incentives and other policy support,” explained Badiga.

Luharuka further added that business intention was not serious when SEZs were conceptualised and notified. “Several allottees in SEZs were hoping for real estate benefits rather than doing some serious foreign trade. However, this did not happen for them. Without proper business activity, several SEZs became nonoperational and defunct. Several importers

also resorted to over invoicing and importing low quality products at higher rate, thus siphoning off funds from the country. The new policy should focus on addressing malpractices as well,” Luharuka said.

Dr. A. Sakhtivel, Regional Chairman, FIEO said: “RBI should bring export lending under priority lending immediately.”