India's sixth SEZ to start operations in July
Thursday, 29 April 2004, 19:30 IST
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NEW DELHI: The $2.6 billion Mundra special economic zone (SEZ) in Gujarat, India sixth such greenfield project, will be officially allowed to begin operations in July, a senior commerce ministry official said Thursday. "The first phase of the Mundra SEZ project is complete. The notification will be issued in July. It will be India's sixth greenfield project and the ninth functional SEZ since the scheme was launched in 2000," K.G. Pillai, additional secretary in the commerce ministry, said. "By next year, we expect five more SEZs to be operational," Pillai told IANS on the sidelines of a workshop on economic zones organized jointly by the International Finance Corporation (IFC) and Foreign Investment Advisory Service, a joint project of IFC and the World Bank. Since the concept of SEZs was announced in India in April 2002, the government has given its approval for 24 projects. Of these, five of them at Indore, Jaipur, Jodhpur, Kolkata and Moradabad are already operational. Three others, which were export-processing zones earlier, were designated as SEZs later. Kicking off the workshop, Dimitris Tsitsiragos, IFC's director for South Asia, said China was a good example of his SEZs could be an attractive source for foreign direct investment. "Though South Asia is one of the fastest growing regions in the world, it is characterised both by low FDI and low levels of manufacturing. South Asia continues to attract FDI worth only about one percent of gross domestic product (GDP) annually, as opposed to four percent of GDP for China," he said. He said most countries in the region were implementing economic reforms programme but recognize that it takes time for these to take effect at the national level. "It is for this reason that there is a high level of interest in South Asia in the successful experience of other countries like China in establishing special economic zones, not as an alternate to broad-based liberalization, but as a way to accelerate progress." The IFC, the private sector lending arm of the World Bank Group, looks at India as having a good potential in attracting FDI in manufacturing and services and said the institution will invest on establishing SEZs in the region on a case-by-case basis. S.N. Menon, additional secretary in the commerce ministry, said India had already achieved the target of registering a one-percent share of global trade in services, and was on the road to realizing the same for manufactured items. He said India exported services worth $23 billion last year, of which $8 billion was from software and $3 billion from business process outsourcing. "India's share in global services trade is already 1.7 percent," he said. The target for India's manufactured exports was one percent of global trade by 2008, as against the current share of 0.8 percent. He said India exported goods worth $61 billion last year, of which free trade zones accounted for $9 billion. "With the removal of textiles quotas by the end of this year, exports will boom further. Textiles account for 25 percent of India's exports."
Source: IANS
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