BlogFree Trade Warehousing Zone
FTWZ or free trade warehousing zone is called by many names such as export processing zone, foreign-trade zone, and special economic zone. It is a free port area within a nation wherein goods or products can be landed, handled, produced or manufactured, re-configured, and even re-exported smoothly, without any interference from the government or customs officers.
Only when the goods are shifted or moved to be delivered to the end consumers within the domestic location, do they come under the radar of the customs duties. Free trade and warehousing zones fall within the special category of SEZ and offer quick and reliable services such as fast cargo delivery, customs clearance in one shot, and integrated logistics solutions (from packing, sorting, management, inspection, goods strapping). FTWZ is considered in the special category due to its power to manage large-scale trading operations on an international scale.
In India, free trade and warehousing zones are a great success as in countries like the UAE, Singapore, and Rotterdam. You need to visit such FTZs, which are built within huge acres of land and benefit the region where they are located to establish them as primary logistic hubs.
The Jebel Ali Free Zone
In the international arena, the Jebel Ali Free Zone or JAFZA is accountable for twenty-five percent of all goods containers that arrive at Jebel Ali Port and for twelve percent of air freight containers arriving at the Dubai International Airport. Starting in 1985, the JAFZA covers almost 48 sq. km. area and offers warehousing facilities to more than 6500 companies worldwide. Thousands of people are offered jobs via the companies that conduct export/import business within the free zone.
The Indian Free Trade Zones
In the Indian subcontinent, free trade and warehousing zones were first introduced via the Exim Policy with the sole motive of facilitating better import/export trade of goods and services. Each zone was built around five lakh square feet built-up area. The Indian government introduced a special FTWZ Policy as an integral part of the FTP – Foreign Trade Policy 2004-2009 and the SEZ ACT of 2005, including the SEZ Rules 2006. All these Acts promoted and established the development of free trade warehousing zones in India based on the country’s strategic location and skilled labor. The Indian government has also allowed 100% Foreign Direct Investment.
Concept Behind Free Trade Warehousing Zone
FTWZ is termed as a safe and sanitized zone and given status as a foreign territory to carry out trade businesses. Free trade and warehousing zones are also considered fully integrated zones that can be liberally used as international trading centers. Every free trade zone could provide a well-designed world-class infrastructure.
A Reputed Indian Free Trade & Warehousing Zone Offers The Following Facilities:
- Warehousing storage used for varied products
- Handling tools and transportation equipment
- Office space for commercial purposes
- Use of utilities such as power, water, telecom, and more
- One-stop management and clearance of all import/export products
- All free trade zones are appraised as key links for logistics solutions and global supply chains
FTWZ Objective
The goal of such free trade zones is to build and design trade-related infrastructure so that the import and export activities for goods and services are carried out freely using free currency with advanced warehousing-based infrastructure, modern tools and equipment, dynamic facilities, robust transportation, communications, and streamlined connections, and one-stop customs clearance that can solve all trade formalities. Zones such as OSV FTWZ are true international trading hubs due to their proximity to airports, seaports, and dry ports (offering easy access via road and railways).
Free trade and warehousing zones in India are deemed as the number one logistics hub that can easily facilitate EXIM trade, thus rooting out all inefficiencies that crop up typically during transportation and EXIM cargo value addition process.
Imports in India – FTZ Advantage
You can clear cargo in small-part consignments, which allows flexible consumption and distribution along with duty deferment benefits. The freed-up capital can be used for other core business purposes. It helps cargo handlers avoid any detention charges in the shipping line and promotes customized delivery. Cargo goods can also be stored at warehouse units within the free trade zone at cheap rates as compared to costly detention charges.
Imports into India via FTZs offer valuable benefits such as:
- Quality control before duty payment so that no duty is levied on rejected products
- Exemption from tax for all kinds of handling and transportation of cargo containers from the port area to free trade zones.
- The ready availability of superior container storage yard space built in terms of global safety standards
- Storage, maintenance, and repair facilities for hazardous materials with the FTZ benefited from tax exemption.
- All container freight station services can be paid via free foreign exchange transactions.
- Other value addition services can also be accessed with the free trade and warehousing zones such as packing, labeling, bar-coding, kitting, and many others.
When such activities mentioned above are exempted from taxes along with buying of packaging items, labels, etc into the free trade zones, they can be treated as exports via the supply chain.
Exports from India – FTZ Advantage
- Stuffed containers gaining entry into the FTWZ are seen as deemed export products liable for export benefits.
- Local taxes such as CST, GST, VAT, Excise, etc are exempted from all sundry activities and operations conducted inside the free trade and warehousing zones.
- Better efficiency gained through lowered counter logistics operations via quality control before dispatching goods from India.
- Reduced city costs with stable aggregation and better consolidation.
- Connecting your cargo with other FTZ users for cost savings through a quick last-mile distribution strategy.
OSV – Free Trade & Warehousing Zone
OSV FTWZ can help resolve all your logistics troubles and give a committed solution as our valued customer or client. We provide a flexible multimodal logistics platform on an international scale and endorse our vision by offering quick, adaptive, and customer-centric services. From duty-free imports, deferment in customs payment, tax exemptions, advanced storage facilities, and various other operational benefits to foreign businesses.