What is SEZ?

Kishan Thakkar K


Special economic zones (SEZs) are government-designated zones in India that offer incentives to businesses to encourage them to settle there. SEZs typically offer competitive infrastructure, duty-free exports, tax incentives, and other measures that make doing business easier. SEZs in India are therefore popular investment destinations for multinationals, especially exporters. A primary objective was to attract foreign investment and to provide an environment conducive to exports. 

What is SEZ?

A special economic zone (SEZ) is a territory within a country that is typically duty-free (Fiscal Concession) and has different business and commercial laws primarily to attract investment and jobs. Additionally, SEZs are created to better administrate these areas, which makes doing business easier.

SEZs in India

In 1965, the first EPZ (Export Processing Zone) in Asia was established in Kandla, Gujarat.

Although these EPZs had a similar structure to SEZs, the government began establishing SEZs in 2000 under the Foreign Trade Policy to address the infrastructure and bureaucracy challenges that were seen as limiting EPZs’ success.

At present, 379 SEZs are notified, of which 265 are operational. About 64% of the SEZs are located in five states: Tamil Nadu, Telangana, Karnataka, Andhra Pradesh, and Maharashtra.

Objectives of the SEZ Act

  • Boost the export of goods and services,
  • create more economic activity.
  • Employment generation.
  • To increase domestic and foreign investment.


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