SPECIAL ECONOMIC ZONE

(SEZ)
SWOT ANALYSIS
 Neha
Sharma


YadveNdraa
 HISTORY OF SEZ
India was one of the first in Asia to


recognize the effectiveness of the Export

Processing Zone (EPZ) model in promoting
exports, with Asia's first EPZ set up in
Kandla in 1965.


With the same intentions and view to



attract larger foreign investments in India,

the Special Economic Zones (SEZs) Policy
was announced in April 2000.
 SEZ ?
A Special Economic Zone is a
geographically bound zones where the
economic laws in matters related to
export and import are more
broadminded and liberal as compared to
rest parts of the country. SEZs are
projected as duty free area for the
purpose of trade, operations, duty and
tariffs. SEZ units are self-contained and
integrated having their own
infrastructure and support services.
OBJECTIVE OF THE SEZ ACT

ØGeneration of additional economic activity

ØPromotion of exports of goods and services
ØPromotion of investment from
domestic and foreign sources
ØCreation of employment opportunities
ØDevelopment of infrastructure facilities
 LIST OF DEVELOPERS
WHO HAVE SET UP
SEZS
Ø NokiaSEZ in Tamil Nadu
Ø Quark City SEZ in Chandigarh
Ø Flextronics SEZ in Tamil Nadu
Ø Mahindra World City in Tamil Nadu
Ø Motorola, DELL and Foxconn
Ø Apache SEZ (Adidas Group) in Andhra Pradesh
Ø Divvy's Laboratories, Andhra Pradesh
Ø Rajiv Gandhi Technology Park, Chandigarh
Ø ETL Infrastructure IT SEZ, Chennai
Ø Hyderabad Gems Limited, Hyderabad
 ‘SEZ LOCATIONS IN
INDIA’

 Map- sez.docx
SWOT ANALYSIS FOR INDIAN
SEZS
Strengths


A large and growing domestic

market.
 

Growing middle class with

purchase power
 

India’s large English speaking

workforce
 Strengths


 Relatively low labour costs

 Worldwide acceptance of
capabilities in fields like:
1.Pharmaceutical
manufacturing & research
2.Clinical trials
3.Manufacturing auto parts
4.Engineering designing &
consultancy, IT
5.Entertainment
Weaknesses


 Inadequate institutional support

 Red Tape
 Labour reforms
 Inappropriate locations
 Infrastructure bottlenecks –
connecting infrastructure
like Roads leading to SEZs.
 Political changes

Opportunities


 To use SEZs to catalyze

infrastructure
development.
 New small ports & airports
are also being developed
keeping SEZ concept in
mind.
 Realistically establish
competitive advantages in
SEZs.
Opportunities


 A large NRI base who have

traditionally invested less in
Greenfield development in
India.

 Lower the high transaction
/behind the border costs to
exporters.

 Tap the advantages of
WTO/increase India’s small
share of world trade.


 Opportunities


 To increase investments in core

strength areas like IT and
software products and services.


 An alternative manufacturing
base, particularly compared to
Chinese SEZs.
‘Threats’


 Loosing edge of low labour

costs - many countries are
competing.

 The pattern of buying &
selling may not continue.
With relocations of
industries in other third
world countries, new
competitors will emerge.
‘Threats’


 Prospect of even more

restrictive labour laws being
introduced (e.g.,
“Reservations” for socially
disadvantaged groups in
private sector jobs).

 Formation of economic
blocks, Effect on
Government Revenues.
v
v
vIt is expected that this will trigger
a large flow of foreign and
domestic investment in SEZs, in
infrastructure and productive
capacity, leading to generation of
additional economic activity and
creation of employment
opportunities.