Arpita Mukherjee Parthapratim Pal Saubhik Deb Subhobrota Ray Tanu M. Goyal. Special Economic Zones. in India. Status, Issues and Potential.

Transcription

1 Arpita Mukherjee Parthapratim Pal Saubhik Deb Subhobrota Ray Tanu M. Goyal Special Economic Zones in India Status, Issues and Potential Springer

2 1 Introduction Background India and the Importance of Special Economic Zones SEZs and Their Role in Economic Development Recent Issues Layout of the Book Research Methodology 12 2 SEZs in Select Countries: A Comparison with India Introduction Country Experiences that can be Compared with India Snapshot of Zones in the Selected Countries Administrative Framework and Regulation of Zones Land Acquisition and Choice of Location of SEZs Ownership and Development of Zones Incentives Offered to SEZs Fiscal Incentives Offered to SEZs Non-fiscal Incentives and Other Support Offered to SEZs Contribution of SEZs SEZs, Autonomous Liberalisation and Trade Agreements Conclusion and the Way Forward 43 Appendix SEZs in India: Evolution, Policy Framework and Current Status The EPZ Regime Establishment of EPZs by the Central Government The SEZ Regime The Regulatory Framework for SEZs 55 xiii

3 xiv 3.3 Spread of SEZ: State-Wise Distribution and Sector Coverage of SEZs Distribution of SEZs Across States Sectoral Coverage of SEZs Conclusion and the Way Forward 71 4 Performance of SEZs Introduction Analysis of Secondary Data Export Performance of SEZs Investment in SEZs Employment in SEZs NFE Eamings from SEZs Revenue Forgone from SEZs Performance of Developers: Evidence from the Primary Survey Performance of Units: Evidence from the Primary Survey Export Orientation of Production Import Intensity and Net Foreign Exchange Eamings from SEZs Employment Intensity of Production Overall Performance Assessment for SEZ Units Conclusion and the Way Forward 95 5 Quality of the Business Environment: SEZs Versus DTA Introduction Sampling Framework Motivation«for Locating in SEZs Quality of Business Environment Quality of Business Infrastructure Ease of Access to Social Infrastructure Ease of Döing Business Conclusion and the Way Forward Special SEZs for Services: India's Experiences and the Way Forward Introduction Free Trade Warehousing Zones Finance SEZs Power SEZs SEZs for Aviation Maintenance, Repair and Overhaul (MRO) Services Potential Services SEZs Audio-Visual Services SEZs Professional Services Conclusion and the Way Forward 151

4 xv 7 SEZs and Other Industrial Clusters: Why Incentives Have Not Been Successful in Developing Manufacturing in India? Introduction Cluster Development Policies and Scheines of the Central Government vis-ä-vis the SEZ Policy State Government Policies and Schemas vis-ä-vis SEZs Why Have Cluster-Based Development Polices and Schemes Failed to Attract Manufacturing? The Way Forward SEZs in the Multilateral Trading System Introduction Overview of the SCM Agreement Developing Countries and Special and Differential (S&D) Treatment in the SCM Agreement: Provisions for India Analysis of Countervailing Initiations and Measures Faced by India Special Economic Zones and the WTO Agreement on Subsidies and Countervailing Measures Special Economic Zones and Specific Subsidies Making the Special Economic Zones WTO-Compliant Use of Non-specific Subsidies Handling the WTO Inconsistency on Capital Goods Remission of Indirect Taxes on Inputs Remove the NFE Criteria and Allow DTA Sales from SEZ Government and Credit More Favourable Business Atmosphere Subsidies to SEZ Units and Corporate Social Responsibility (CSR) Subsidies Through Services Maintaining a Stable and Somewhat Undervalued Currency in the Face of a Currency Appreciation Conclusion and the Way Forward 194 Appendix 1: From the Canada Border Services Agency Website 195 Appendix Special Economic Zones and Regional Trade Agreements Introduction RTAs and India Fallouts Associated with Signing RTAs: Inverted Duty Structure 207

5 xvi 9.4 Unfavourable Treatment to SEZ Producers vis-ä-vis FTA Partners FTAs, Tariff Structure and Horizontal FDI FTAs, Tariff Structures and Vertical FDI The Complementary Role of SEZs and the RTAs Conclusion and the Way Forward Challenges Faced by SEZs in India and the Way Forward Introduction Baniers Faced by the SEZs Institutional Mechanism and Its Implications Challenges Related to Land Acquisition Location, Sharing of Infrastructure and the Business Model Barriers Related to Fiscal Incentives Challenges Related to Shifting of Existing Units from DTA to SEZ Challenges Related to Backward and Forward Linkages How to Make SEZs a Success Story? Strengthening the Regulatory and Administrative Framework Addressing Land-Related Issues Providing the Right Incentives to SEZs Encourage Backward and Forward Linkages Need for More Proactive Marketing of SEZs What Kind of SEZs Should India Develop and Which Units Should Locate in SEZs? Conclusion and the Way Forward 245