India’s first SEZ to be developed by an Urban Local Body

The Union Government has notified two new Special Economic Zones (SEZs) in Puducherry to strengthen industrial development, boost exports, generate employment, and advance India’s self-reliance goals in strategic sectors.

The proposals were approved by the Board of Approval for Special Economic Zones under the Department of Commerce.

India’s First Municipality-Developed SEZ: The first project is an IT/ITES SEZ that will be developed by Oulgaret Municipality at Thattanchavady village in Oulgaret Taluk.

Key Highlights:

• First SEZ in India to be developed by an Urban Local Body (Municipality).
• Area: 8.623 hectares
• Proposed Investment: ₹725 crore
• Expected Employment Generation: 3,500 direct and indirect jobs
• Focus Sector: Information Technology (IT) and IT-enabled Services (ITES)

Multi-Sector SEZ at Karasur: The second project is a Multi-Sector SEZ to be developed by Pondicherry Industrial Promotion Development and Investment Corporation at Karasur village in Villianur Taluk. The SEZ is expected to attract investments across multiple industrial sectors and contribute to regional economic growth. 

About Special Economic Zones (SEZs)

India’s SEZ policy was launched in April 2000 with the objective of creating internationally competitive export hubs. Special Economic Zones Act, 2005 passed by Parliament in May 2005. Received Presidential assent on 23 June 2005. Special Economic Zones Rules, 2006 came into force on 10 February 2006.

Key Features of SEZs

• Designated duty-free enclaves for authorized operations.
• Treated as territories outside India’s customs territory for specific purposes.
• No import licence required.
• Manufacturing and service activities permitted.
• Simplified regulatory procedures.
• Domestic sales allowed but subject to applicable customs duties and import policies.

Recent Reforms in SEZ Rules

To support India’s electronics and semiconductor ambitions, the government has amended Rule 5 of the SEZ Rules, 2006. 

As per the amendment, an SEZ set up exclusively for the manufacturing of semiconductors or electronic components will require a minimum contiguous land area of only 10 hectares, reduced from the earlier requirement of 50 hectares.

Source: PIB