Kamal Nath calls for FDI in Special Economic Zones'
New Delhi, Mar 04: Commerce Minister Kamal Nath today (Mar 04, 2006) called for increased foreign direct investment (FDI) in India's Special Economic Zones (SEZs) as these zones, he said, offered tremendous possibilities for FDI.
Speaking at an Open House Interactive Session with SEZ stakeholders here, he asked the stakeholders to come up with state-specific issues, which he would take up with respective state governments in order to make the SEZs truly effective.
On the occasion, Mr Kamal Nath formally released the SEZ Act, 2005 and SEZ Rules, 2006 which have come into effect from February 10, 2006.
He said he was open to suggestions for further simplification of the procedural and regulatory aspects of the SEZ Act.
The government has recently approved 117 new SEZs, which have committed investments of over Rs.1,00,000 crore and employment of over 500,000 people by 2009, he said, adding that the coming year would see phenomenal investments in SEZs in sectors such as IT, pharma, bio-technology, textiles and chemicals.
Of the 117 SEZs approved for establishment, seven are already become operational in 2004-05 and a further six SEZs are now getting ready for operation, while other zones are at various stages of implementation.
Mr Sharad Jaipuria, Chairman, Export Promotion Council for EOUs and SEZs, said the SEZ Act and Rules would provide stability and continuity in the SEZ policy and would help developers in firming up their plans for setting up of new SEZs quickly.
As a result of the financial package provided under the Act, transaction costs would come down, thereby helping exporters to become internationally competitive, he said.
Promotion of investments from both domestic and foreign source is one of the main objectives of the SEZ scheme. At present, foreign investments, including NRI investment in the setting up of units in SEZs is Rs 600 crore, accounting for about 25 per cent of the total investments. FDI up to 100 per cent for setting up of SEZs is permissible with the clearance of the Board of Approval.