The Government of India introduced Special Economic Zone (“SEZ”) and Software Technology Parks of India (“STPI”) schemes with the objective of providing internationally competitive and hassle free environment for earning foreign exchange, attracting foreign direct investment, generation of employment in India. This document analyzes the highlights and salient features of these schemes.
Special Economic Zone (“SEZ”) is a free trade zone approved by the Government where business and trade laws differ from the rest of the country. The SEZ scheme envisages association of private sector with the development of SEZ. The objectives of the zones include: increased trade, increased investment, job creation and effective administration. The economic laws of a SEZ are more liberal than the country’s typical economic laws.
Software Technology Parks of India scheme (“STPI”) is a 100 percent export oriented scheme for the development and export of computer software, including export of professional services using communication links or physical media. This scheme focuses on one sector, i.e. computer software. The scheme integrates the government concept of 100 percent Export Oriented Units (EOUs) and Export Processing Zones (EPZs) and the concept of Science Parks/Technology Parks, as operating elsewhere in the world.
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