Thursday, August 28, 2008

SEZs expected to receive US$ 45.73 billion as investments by 2009

Special Economic Zones (SEZs) are set to see major investments after the straightening out of certain regulatory tangles. According to India's commerce secretary, G K Pillai, India has approved 513 SEZs till date, of which 250 have been notified. Investments are expected to cross US$ 45.73 billion by December 2009, providing incremental employment to 800,000 people. 

During the last three months, investments in excess of US$ 3.65 billion in SEZs have been announced by various firms. Ansal Properties & Infrastructure Ltd will be investing around US$ 823.42 million for IT SEZs in three states. 

Tata Realty & Infrastructure is planning to invest more than US$ 686.05 million to build an IT SEZ, in a joint venture with the Tamil Nadu government. Infrastructure Leasing & Financial Services, in a tie-up with Maharashtra Industrial Development Corp (MIDC), will be investing about US$ 1.82 billion in SEZs in Maharashtra. State-run trading firm, MMTC Ltd, has invited bids to set up SEZs in various sectors. MIDC will be developing 22 SEZs in Maharashtra. After MIDC faced hurdles in land acquisition in the state, it has set up a dedicated cell to recompense and rehabilitate displaced landowners. A draft of regulatory amendments to aid investments has been planned including one to make sure that developers also gain from the scheme. 

Duty drawback credits, extended to exporters alone, will now be offered to developers as well. L B Singhal, Director General, Export Promotion Council for EOUs and SEZs, said that offshore banking units would also get exemption from complying with statutory liquidity ratio. 

Till date, around US$ 18.52 billion have been invested in SEZs, generating employment for around 350,000 people, as per statistics from the government's SEZ site. Last year, SEZs generated about US$ 15.23 billion in exports, a 92 per cent rise from the previous year. India's total exports during the period grew by 23 per cent to US$ 155.5 billion. 

Commerce secretary, G K Pillai, has assured, "The Ministry of Commerce is very clear. No land can be forcibly acquired for SEZs." Sachin Saxena, operations director, OLS, Nokia India, said, "Whatever you do in India there are bottlenecks - whether you start an SEZ, airport or an airline, anything. We have absolutely no issue on that." Nokia India was among the first global firms to develop an SEZ in India. 

Nirav Mody of JB SEZ, also the Vice President of strategic marketing and business development of JB Chemicals & Pharmaceuticals Ltd. said, "There are ambiguities in the regulations, but they are no major show stoppers." 

Singhal further added, "The project looks good on paper. We hope to get some decent returns on it." "After Nokia, Motorola has come. Adidas and Nike have come. There is tremendous interest.

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