Govt eases land requirement norms for SEZ to attract more investors

New Delhi: Government made the special economic zones attractive for the investors by notifying relaxations in the minimum area requirements and easing the exit clause for developers on Monday. In line with the announcement made by the commerce and industry minister in April, the amendment in SEZ rules will allow SEZ developers to add one product category on each additional 50 hectares of land.

There will be no minimum area required for IT SEZs, but only a minimum built up area of 1 lakh square meters for the top-7 cities, 50,000 square meters for the next 15 cities and 25,000 square meters for the rest of the cities. "The idea is to give incentives to push these IT SEZs out of the big cities and explore the less dense cities," said a commerce department official.

Multi-product SEZ's minimum land requirement has been cut to 500 hectares from 1,000 hectares. Single product SEZ's minimum land requirement has been cut to 50 hectares from 100 hectares. Multi-services SEZs will be treated on a par with single-product SEZs, with the minimum area being slashed to half from 100 hectare. This will allow multi-product SEZ developers with a minimum land requirement of 500 hectare to set up multi-services SEZ on an additional 50 hectare of land.

For SEZs to be set up exclusively for electronics hardware, agro-based food processing, biotechnology, handicrafts, the minimum area required will be 10 hectares.

Agro-based food processing SEZs are being introduced following demands by the agrarian states. SEZs allow duty-free imports or domestic procurement of goods and also provide 100% income tax exemption on export income for SEZ units for the first five years.