Search the Internet          Tips  Sites: Finance, Investment

Gujarat to launch five free trade zones

Gujarat, India's second-most industrialised state, has plans to convert itself into an export powerhouse by putting up five tax-free trade zones, government officials said on Friday.

The special economic zones, a key tool in the central government's export-import policy, will dot five different locations along Gujarat's 1,600-km coastline, they said.

A state government official said the SEZs would provide Indian entrepreneurs an edge over fierce competitors like China in the world market.

"China's exports have rapidly grown because of (its) free trade zones. Though we are a late starter, the SEZs should help us compete on an even level if not from a higher plane," he said.

The government has already converted two existing free trade zones at Kandla and Surat into special economic zones and granted several tax benefits.

The Kandla zone is located around the biggest port on India's west coast, while the Surat zone is meant for diamond and precious stone processing and exports.

Work on a new green-field special economic zone at Positra, about 350 km from Ahmedabad is set to start soon.

Two more such zones have been proposed at the port towns of Mundra and Gandhidham, officials said.

"We have identified Gandhidham, near the Kandla port as an ideal location to develop a special economic zone," Ravi Saxena, managing director of Gujarat Industrial Development Board told Reuters.

GIDB is the state's apex body responsible for developing infrastructure.

Adani Exports Ltd, which operates Mundra Port in the Kutch region, has submitted an Rs six-billion plan to the state for developing a free-trade zone at Mundra, he said.

The Positra special economic zones, modelled on the Shenzen free trade zone in China is promoted by Bombay-based Sea King Infrastructure at an investment of over Rs 250 billion.

The project, set to achieve financial closure by October, has attracted equity investors such as Sumitomo Corp, the Port Authority of Singapore, the Gujarat Maritime Board and domestic financial institutions like the Industrial Development Bank of India.

"It's quite an ambitious project. We hope to see the first phase of the project completed by 2005-06," an official said.

The government has announced exemptions from various duties and tariffs to units set up under SEZs, the official said.

"The units in Positra will also enjoy income tax holidays and can mobilise funds from the international market without prior approvals," he said.

Tell us what you think of this report