BlogFree Trade Zones In India
The special economic zones in India are also called free trade zones or OSVFTWZ These places are strategically planned and developed as special areas that can uplift our economic condition. FTZs provide a whole lot of facilities and incentives to attract FDI or foreign direct investment and promote global trade relations. To navigate this diverse and unique landscape, you must first have a thorough understanding of the free trade zones, their primary locations, the lucrative benefits associated with these zones, and the regulatory framework around them.
Key Locations
Mumbai FTZ – It is a well-established zone that houses a varied range of industrial segments that include IT, pharmaceuticals, chemicals, textiles, engineering, and more.
NCR Delhi FTZ – The free trade warehousing zone in Delhi or NCR is an industrial hub mainly for IT and IT-related services.
Chennai FTZ – In Tamil Nadu, the free trade zones attract several IT firms and automobile manufacturers seeking the best business opportunities.
Kandla FTZ – Port-based FTZ in Gujarat, the warehousing zone plays a critical role in international logistics and trade operations.
Hyderabad FTZ – Well-known for its pharma and IT sectors, this is a Telangana-based special economic zone and a popular warehousing storage center for many international corporations.
Types of Free Trade Zones
There are many types of FTZs. There are multi-product SEZs that cater to a wide spectrum of businesses and industries that operate within the zones. Then there are sector-specific zones that focus on building connections with certain industries that have high-growth potential such as the pharma industry, IT sector, textile and biotechnology industries. Port-based special economic zones are typically located near the primary ports and help to operate trade-related and export-oriented businesses. Then you can count on free trade warehousing zones in Delhi that provide exclusive warehousing facilities and even value-added services. Such zones are supportive of trading as well as manufacturing operations.
Delhi NCR Warehousing Zones
According to recent news (March 2024), the New Delhi government announced a newly established Free Trade Zone at the Indira Gandhi International Airport. The SEZ will be a special part of an airport complex. The SEZ will have five acres of airport land to develop economic activities for export/import operations, warehousing, trading, and other regulatory services. The free trade warehousing zone in Delhi is expected to enhance trade activities and simplify procedures to gain tax and other logistics benefits.
Other Purposes of FTZs
Apart from cross-border trade opportunities and improving economic development, government-established free trade zones help achieve varied profitable outcomes such as:
Generating foreign exchange income – FTZs encourage the export of unique or non-traditional goods to boost export earnings by positively affecting the exchange rate. This may encourage more imports at a specific exchange rate (at reduced rates) mainly for domestic businesses and consumers.
Creating Jobs – Foreign trade zones in India help create job opportunities by aiding local businesses to compete with each other and encourage investment in the foreign facilities. FTZs can also assist local economic development by generating economic job-creating activities in the neighboring regions and form ancillary industries and related services.
Increase FDI – By tax exemptions and lenient regulatory compliances, free trade zones create a trade-friendly environment that improves a country’s economic value and appeals to global investment partners. When foreign investors bring hefty capital gains into a foreign trade zone, it uplifts the economy of the local area and fosters growth and progress.
Surge in Technology and Knowledge – The positive presence of foreign businesses in the free trade zones can lead to the bombardment of technological advancements and superior knowledge to benefit local businesses. Local supply chains operating in a free trade zone have to maintain global production standards and high-quality products. For this purpose, the local workers and management are given adequate training to enhance their skills. This in turn helps achieve upgraded local work standards and stimulates smooth production processes of non-traditional products.
OSV FTWZ in Delhi NCR Area
The new FTZ located at the Delhi airport and the existing free trade warehousing zone in Delhi developed by Onnsynex Ventures Pvt. Ltd. help increase foreign trade activities and bring investment projects into the Indian territory. OSV FTWZ offers a high-tech warehousing setup that enables streamlined import and export of goods and services into India. OSV free trade warehousing zone in Delhi NCR also permits trade transactions to be carried out simply in convertible currency.
OSV FTZ in the Delhi NCR area is the connecting link that joins the Indian multinational companies with the foreign multinational companies to conduct import/export and re-export of goods or services minus the burden of customs duties and taxes. These free zones are conveniently located near ports and airports to simply trade procedures and offer relief from taxes and duties. The SEZ warehouses allow flexible and customized services, reduce working capital costs, and also deliver the fastest customs regulatory clearances.