In March 2000, the Government of India announced a new scheme for setting up Special Economic Zones (SEZ) in the country. The policy called for establishing SEZs in public sector, private sector, joint sector and by state governments. Even multinational companies can set up a SEZ in India.
A Special Economic Zone (SEZ) is a specifically delineated duty free territory and is deemed to be foreign territory for the purpose of trade operations and duties and tariffs. In other words , an SEZ has different set of laws , rules and regulations, which are different from the law of the land.
The units in the SEZ have to be net foreign exchange earners but shall not be subjected to any pre-owned determined value addition or minimum export performance requirements. Further, offshore units maybe setup in the SEZs.
The basic aim behind the creation of SEZs is to increase the inflow of foreign investment into India. Another major aim is to provide an internationally competitive setup and an obstacle free economic environment to boost India's export.