Special Economic Zone (SEZ) board will now issue industrial licences for the production of defence related goods to SEZs, a move, which is aimed at speedier approval of such projects and single-window clearance promised to SEZs. Further, special economic zone units producing defence related items will no longer have to go to the Department of Industrial Policy & Promotion (DIPP) for an industrial licence. The decision to issue industrial licences was taken in meeting of Board of Approval (BoA) for SEZs, which is headed by Commerce Secretary and attended by senior officials from key ministries including Finance, Revenue, Home, Urban Development and Micro, Small & Medium Enterprises.
Meanwhile, the SEZ Act of 2005 gives the SEZ Board, which approves proposals for setting up these zones and takes decisions on matters related to their operation, an authority to issue industrial licences, but it had not been exercising it for the last seven years owing to some uncertainty over rules, as defence is a sensitive area. During the SEZ Board meeting, the three proposal have been considered for issuing licences include Syrma Technology’s application for producing defence products such as radio and satellite communication equipment and Data Patterns’s application for design, development and manufacture of radar, sonar and electronic warfare systems and Pipavav Defence and Offshore Engg Co’s application for manufacture and development of C4I systems, electro-optical systems, underwater systems and avionics.
Investment in SEZs has reduced over the past two years due to imposition of taxes and the requirements of certain clearances. Meanwhile, the government has started taking measure to ease SEZs norms, which will helpful to enhanced country’s industrial development and increase exports. In an attempt to revive investors’ interest in the zones, Commerce Ministry has recently slashed the minimum area requirement for setting up SEZs.
