Upload
upendhra90
View
535
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Citation preview
Exim BankIndia
Special Economic Zones:Conducive Investment Regimes
byS.R. Rao
Chief General ManagerExport-Import Bank of India
New Delhi, April 29, 2004
2
Exim Bank
IndiaStructure of Presentation
Definition of SEZs / EPZs
Objectives of Setting up SEZs / EPZs
Common features of SEZs / FTZs
Performance of EPZs / SEZs in Select
Countries
Some Success Factors
Exim India: Role & Activities
3
Exim Bank
IndiaDefinition of EPZs / SEZs
World Bank: EPZs are defined as fenced-in-industrial estates specialising in manufacturing for exports that offer firms free trade conditions and a liberal regulatory environment.
India’s Exim Policy: SEZs are specifically delineated duty-free enclaves and shall be deemed to be foreign territories for the purpose of trade operations and duties and tariffs
4
Exim Bank
IndiaObjectives
To enhance foreign exchange earnings by
promoting exports
To attract Foreign Direct Investment and
induce technology transfers
To generate employment opportunities and
assist in income generation
5
Exim Bank
IndiaCommon Features
Unlimited duty- free imports of raw materials, intermediate inputs and capital goods
Minimal bureaucratic intervention or red tape with greater flexibility in labour laws.
Generous and long term tax holidays and concessions
Superior communication and infrastructure
6
Exim Bank
India
Performance of EPZs in Select Countries
Mauritius: Exports from EPZs are 64% of total exports.
More than 500 enterprises and 87,000 people employed in EPZs
Bangladesh: Exports from 6 EPZs contribute around 20% of total exports.
There are 180 industries in operation in EPZs
7
Exim Bank
India
Performance of EPZs in Select Countries (cont..)
Sri Lanka: It has 8 EPZs and 3 industrial parks.Exports from EPZs account for over 20% of the Country’s total exports
Mexico: The concept of an EPZ is reflected in the Maquiladora Programme.
They employ over 1 million workers in over 3800 maquiladoras and account for over 40% of total exports.
8
Exim Bank
IndiaSome Success Factors
Private Development and Management
The onsite infrastructure should be privately developed and managed.
Development of infrastructure external to zone to enable spillover effect by facilitating transport and communication.
Encourage economical use of resources and factors of production.
9
Exim Bank
India
Some Success Factors
Business Friendly Labour LawsRemove labour market constraints such as cumbersome firing procedures to reduce market adjustment and labour costs.
Strengthen legal and regulatory areas to prevent abuse of workers’ safety and health.
Create an agency to protect the interests of workers so as to reduce labour turnout and absenteeism and improve labour productivity.
10
Exim Bank
India
Some Success Factors
Role of GovernmentGovernment involvement needs to be clearly defined. It should provide the initial impetus like feasibility studies, encouraging private sector involvement and promoting the zone abroadIt should provide legal & regulatory framework and leave the running of the zone to private sector.It should provide a stable, efficient and transparent policy framework.
11
Exim Bank
IndiaSome Success Factors
Nodal Agency to act as a Facilitator and CatalystIt should aid in quality enhancement, productivity, innovation and creativity, cater to training requirements; carry out assignments to identify management and technical problems.It should act as a one stop service centre to provide assistance in identification of investment opportunities, site location, obtaining clearances E.g. Mauritius Export Processing Zones Development Authority (MEPZDA)E.g. Bangladesh Export Processing Zones Authority (BEPZA)
12
Exim Bank
India
Some Success Factors
Develop Sector Specific Economic ZonesFocus on specific areas of activities depending on locational advantage, local skill and infrastructure.E.g. Santacruz SEZ - focus on electronics and gems and jewellery.
Size of Economic ZonesIncrease in the size of the zones to impact economies of operations within the zone. E.g. Hainan SEZ (China) – 34,000 sq. kms
13
Exim Bank
IndiaSome Success Factors
Linkages between Zone & Domestic IndustryDevelop linkages by sourcing raw materials from domestic sources.Develop local partnerships through shared technology and investment in human resource. Encourage local suppliers by giving them incentives to supply to the economic zones.Set up an agency to identify and facilitate such linkages and enable local firms to procure skills and technology to supply to the zone.
14
Exim Bank
IndiaSome Success Factors
Implementation of IncentivesActual implementation of incentives which are granted has to be ensured. Incentives should be granted in a streamlined manner and documentation should be simplified.
Focus on QualityGiven the growing trend of global production networks, requiring suppliers to respond flexibly.Quality, productivity and innovation are needed to survive global competition and attract quality investors.
15
Exim Bank
IndiaExim India: Evolving Vision
To creating export capability by
arranging competitive financing at
various stages of the export
cycle
From financing,
facilitating andpromoting
India’sforeign trade
To developingcommercially viablerelationships with a
target set of externallyoriented companies by
offering them a comprehensive
range of products and services, aimed at
enhancing theirinternationalisation
efforts
16
Exim Bank
IndiaExim India: Role & Activities
Policy Input - Study on “Export Processing Zones in Select Countries: Critical Success Factors”
Study covered Mauritius, Bangladesh, Sri Lanka, China, UAE, Mexico, Malaysia, Philippines, Ireland and India – Success Factors in Other Countries
Study published as an Occasional Paper
17
Exim Bank
IndiaExim India: Role & Activities
Conducive financial environment essential for
Success of SEZs
Policy Input - Study on “Offshore Banking
Units in Select Countries” – Singapore,
Malaysia & Mauritius
Round Tables on “SEZs and Offshore
Banking Units”
18
Exim Bank
India
Thank You