Unable to attract investments and seeking to address the concer of the investors, the Government has decided to commission a study by the economic think thank ICRIER to go into the issues that has led to a decline in the interest of investors in special economic zones (SEZs) across the country.

"We have asked ICRIER to look into various issues facing SEZs. Some sections of the investors feel that the free trade agreements are affecting investments in these zones. So how does the FTA environment affect the SEZ. This is also one of the mandates which we have given to them," Joint Secretary in the Commerce Ministry Rajeev Arora said here on Friday.

The study will also look at the various schemes available for exporters outside the SEZs. The SEZ developers and units have demanded from the government that the export promotion schemes should be extended to the units in these enclaves as well. SEZs are loosing sheen because of global economic slowdown and imposition of minimum alternate tax (MAT) and dividend distribution tax (DDT). A large chunk of developers have sought more time to execute their projects while a number of them have surrendered their zones.

Mr. Arora said manufacturing activities in these zones are declining because of the overall deceleration in the sector. He said infrastructural bottlenecks are also impacting the zones besides issues related with land acquisition. "Things which will be on our agenda and which we will try to take it up with the Finance ministry include extension of benefits under chapter 3 (which is related with foreign trade policy). We would also see in what way we can help units to get better finance from different institutions," he added.

He said in the days to come, the defence sector will also see huge business potential in these zones. In April, the government unveiled a package of reforms including easing of land norms to revive investments in SEZs, but refrained from accepting a major demand of developers for MAT waiver due to fiscal constraints. Exports from special economic zones (SEZs) grew by about 31 per cent year-on-year to Rs. 4.76 lakh crore during 2012-13. Shipments from these zones stood at Rs. 3.65 lakh crore in 2011-12.

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