Business Standard

Revamped SEZ law unlikely before polls

- SHREYA NANDI New Delhi, 16 February

The revamped Special Economic Zone (SEZ) law is unlikely to see the light of the day before the upcoming Lok Sabha elections, two people aware of the matter said. The commerce department had sought the Union Cabinet’s nod to bring amendments to the existing SEZ Act, 2005 late last year. The plan, thereafter, was to introduce the Bill in the winter session of Parliament. Cabinet’s approval remains pending.

“The changes in the SEZ law will be possible only after the Lok Sabha elections. The exact time will depend on the priorities of the new government,” one of the persons cited above told Business Standard.

The commerce department had prepared an SEZ (Amendment) Bill, as the government believed that a revamp was needed to develop a fresh framework, in-line with the emerging order of global trade, to support the building of industrial parks with worldclass infrastruc­ture, and to attract investment in manufactur­ing.

The idea was also to enable easier integratio­n of SEZS with the domestic market so that firms in the special zones don’t lose out due to restricted market access.

It started with finance minister Nirmala Sitharaman’s 2022 Union Budget announceme­nt that the SEZ Act will be replaced with a new legislatio­n – Developmen­t Enterprise and Services Hubs (DESH) Bill – that would cover all large existing and new industrial enclaves to optimally utilise available infrastruc­ture and enhance competitiv­eness of exports.

While SEZ exports contribute to almost a fifth of the total exports, the government believes that its performanc­e has not been up to the mark and has not been able to attract investment­s in the manufactur­ing sector.

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