Changes in works to create domestic demand for SEZs

The government is working on policy changes to create domestic demand opportunities for special economic zones (SEZ) manufacturers, in a bid to protect the local industry, and absorb excess production from cancelled export orders due to the 50 per cent tariff imposed by the United States (US) on several Indian products, according to government officials.

- SHREYA NANDI

One of the ways could be by allowing the sale of products manufactured in SEZs to the domestic market on a 'duty foregone basis' on raw materials, instead of the finished product, the officials said. At present, SEZs pay full Customs duty, in case a finished product is sold outside these zones or the domestic area.

The change, if implemented, is expected to spur value addition and manufacturing in SEZs as the import tax levies on units are expected to be lower.