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Commerce ministry considers units transfer within SEZs

The commerce ministry is trying to build an inter-ministerial consensus on the policy to allow shifting of units from one Special Economic Zone (SEZ) to the other.

business Updated: Jun 10, 2010 15:33 IST

The Commerce Ministry is trying to build an inter-ministerial consensus on the policy to allow shifting of units from one Special Economic Zone (SEZ) to the other.

The Board of Approval (BOA), which clears SEZ proposals considered the issue in its last meeting on June 8. "While the BoA agreed in-principle that there should be a policy for migration of units from one SEZ to the other, some departments raised concerns, which would be sorted out," a senior Commerce Ministry official said.

The official said some government wings like the Revenue Department had apprehensions that this provision, if added to rules, might be misused.

But the Commerce Ministry, in-charge of SEZ policies, is firm on its stand that migration with some clauses to check misuse should be allowed.

"If an SEZ is closed for some reason, what happens to the units there...we need to have some policy for that eventuality," he said.

In fact, the 19-member inter-ministerial BoA, has already received "references from some units seeking shifting of location from one SEZ to the other".

Such requests would come more often with more of the tax-free enclaves becoming operational, he said.

Requests for migration from three types of units are likely to come up before the government. They would include those which have not commenced any activity. There would also be units which have started import and procurement of goods but have not begun exports or commenced production.

The requests may also come from the operating units.

Of the 578 SEZs approved, 105 have become operational.

The zones are gradually emerging as exporting hubs. Exports from SEZs were valued at Rs 2.20 lakh crore in 2009-10, up 121.29 per cent from the previous fiscal.