Central Government Notifies New Multi-Product Special Economic Zone in Andhra Pradesh

The Ministry of Commerce and Industry, Department of Commerce (SEZ Division), issued a Notification, S.O. 6033(E), on December 23, 2022, formally establishing a new Multi-Product Special Economic Zone (SEZ) dedicated to footwear manufacturing. This significant development follows a proposal by M/s. Hilltop SEZ Development India Private Limited to set up the SEZ at Innagaluru Village, Srikalahasti Revenue Mandal, initially proposed for Chittoor District, in the State of Andhra Pradesh. The Central Government, having confirmed that all requirements under sub-section (8) of section 3 of the Special Economic Zones Act, 2005 (28 of 2005), were fulfilled, had previously granted a letter of approval for the development, operation, and maintenance of this SEZ on November 24, 2022. The notification came into force upon its publication in the Official Gazette on December 23, 2022.

In exercise of the powers conferred by sub-section (1) of section 4 of the Special Economic Zones Act, 2005, and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government officially notified an area of 116.307 hectares for the new SEZ. This area encompasses various survey numbers within Inagaluru Village of Srikalahasti (M), located in Tirupathi District. The detailed land parcels, including specific survey numbers and their corresponding areas in hectares, were meticulously listed within the notification, ensuring statutory precision regarding the designated zone. The legislation provided: “NOW, THEREFORE, the Central Government, in exercise of the powers conferred by sub-section (1) of section 4 of the Special Economic Zones Act, 2005 and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, hereby notifies the 116.307 hectares.”

Further, the Central Government, utilizing its authority under sub-section (1) of section 13 of the Special Economic Zones Act, 2005, constituted an Approval Committee for this newly established Special Economic Zone. This committee is tasked with fulfilling the purposes outlined in section 14 of the said Act, which typically involves overseeing and facilitating the operations and approvals within the SEZ. The committee comprises a Chairperson, who is the Development Commissioner of the Special Economic Zone (an ex officio member, meaning by virtue of office), and several other ex officio members. These include a Director or Deputy Secretary from the Ministry of Commerce and Industry, a Zonal Joint Director General of Foreign Trade, a Commissioner of Customs or Central Excise, a Commissioner of Income Tax, and a Director (Banking) from the Ministry of Finance. Additionally, two officers nominated by the State Government, not below the rank of Joint Secretary, are included, alongside a representative of the Developer of the zone as a special invitee.

In a move to further streamline trade and logistics for the SEZ, the Central Government also appointed December 23, 2022, as the date from which this Special Economic Zone shall be deemed to be an Inland Container Depot (ICD) under section 7 of the Customs Act, 1962 (52 of 1962). This declaration, made under sub-section (2) of section 53 of the Special Economic Zones Act, 2005, grants the SEZ the status of a customs-bonded area, facilitating the handling and clearance of import and export cargo directly within the zone.

The legislative intent behind this notification is to foster economic growth and promote exports by establishing a dedicated manufacturing hub. The Special Economic Zones Act, 2005, was enacted to provide an internationally competitive and hassle-free environment for export-oriented production, attracting foreign and domestic investment, and generating employment opportunities. By formally notifying the land area and constituting a dedicated Approval Committee, the government aims to provide a clear statutory framework for the SEZ's operation, ensuring efficient governance and decision-making. The earlier legal position, while providing for SEZs, required specific notifications for each zone to become operational and to define its administrative and customs status.

The establishment of the Approval Committee addresses potential administrative gaps by centralizing oversight and decision-making for the SEZ, ensuring coordinated efforts from various government departments involved in trade, customs, and finance. This multi-agency representation on the committee is designed to expedite approvals and resolve issues that may arise during the SEZ's functioning. Furthermore, the conferment of Inland Container Depot status is a crucial policy rationale, as it significantly enhances the logistical capabilities of the SEZ. An ICD acts as a common user facility equipped with customs clearance facilities, allowing for the consolidation and deconsolidation of cargo, thereby reducing transportation costs and time for businesses operating within the zone, particularly those involved in footwear manufacturing. This measure is expected to boost the competitiveness of the SEZ's exports and facilitate smoother international trade operations.

Keywords: Special Economic Zone, SEZ, Footwear Manufacturing, Andhra Pradesh, Ministry of Commerce and Industry, Notification, Approval Committee, Inland Container Depot, Customs Act, SEZ Act, Tirupathi District Geo Tags: India, Andhra Pradesh District: Tirupathi