In which year was the Special Economic Zones (SEZs) policy was launched in India?
Show answer & explanation
Correct answer: D
Explanation
The correct answer option is (Option 4): 2000.
Explanation:
The Special Economic Zone (SEZ) policy in India was announced in April 2000. The primary objective of this policy was to boost exports from India, attract Foreign Direct Investment (FDI), and create an internationally competitive environment.
Following the announcement of the policy, and to further strengthen it, the government enacted the SEZ Act, 2005, which came into effect on February 10, 2006.
Key Objectives of SEZs:
- Additional Economic Activity: To expand the economy through the establishment of new industries and services.
- Export Promotion: To make the export of goods and services internationally competitive.
- Investment Promotion: To attract investment from both domestic and foreign sources.
- Employment Generation: To create direct and indirect employment opportunities on a large scale.
- Infrastructure Development: To build world-class infrastructure in line with international standards.
Key Facts:
- Free Trade Zone (FTZ): India was one of the early countries to recognize the significance of SEZs. Asia's first Export Processing Zone (EPZ) was established in 1965 in Kandla (Gujarat), which was subsequently converted under the SEZ policy framework.
- Special Status: An SEZ area is treated as a 'Foreign Territory' with regard to trade operations, duties, and tariffs.
Important Questions for Upcoming Examinations:
Question: Where was India's first Export Processing Zone (EPZ) established?
Answer: Kandla, Gujarat (1965).
Question: In which year was the Special Economic Zone (SEZ) Act passed, and from when did it become effective?
Answer: It was passed in 2005 and became effective on February 10, 2006.
Question: What is the greatest benefit received by units operating within an SEZ?
Answer: Significant exemptions in Income Tax and Customs Duty.