|
Government has facilitated the business
activities by allotting special land to major industries
and service sectors. These include the Technology Park
(both hardware and software), Special Economic Zones
(SEZs), Export Promotion Zones (EPZs), etc. Apart from
these are the Growth Center Schemes that provide various
incentives to the investors.
For most of the industries and the
service sectors FDI is allowed freely through automatic
approval from the Reserve Bank of India (RBI). However,
there are certain sectors/ activities where the FDI
is not allowed beyond a certain limit. These businesses
or activities need to get the approval from the government,
which in turn is decided on the basis of the recommendations
from the Foreign Investment Promotion Board (FIPB).
The following are the important sectors where
FDI is allowed freely.
| • |
Infrastructure:
it includes various segments such as power generation
and transmission; projects on various energy sources;
roads, highways, ports, and other mass transport
systems. |
| • |
Airport development |
| • |
Construction activities |
| • |
Manufacturing
activities, except those items categorized under
compulsory licensing or those allotted exclusively
for the small-scale industries category. |
| • |
Software development |
| • |
Electronic items |
| • |
Tourism and related activities |
| • |
Hospitals and pharmaceuticals |
| • |
Film production |
| • |
Food processing |
| • |
Finance companies, other than non-banking.
|
| • |
Courier services, except those with
distribution of letters |
| • |
Business- to –Business e-commerce |
| • |
Trading activities that follow the
prescribed norms |
| • |
ISPs that do not offer gateways
and mail facilities |
| • |
Alcohol distilling and brewing |
The significance
of EOU and EPZ
The Export Processing
Zones (EPZs) are completely separated from the Domestic
Tariff Area (DTA) by economic barriers. They are intended
to boost world-class export at minimum cost. The duty-free
exports at EPZs focus the competitive international
market.
The 100% Export Oriented Units (EOUs)
were set up in 1980 in order to trigger large-scale
export activities. The EOUs allow the investor to procure
the necessary raw materials and the machinery from anywhere,
without paying any excise or custom duty. However, the
EXIM policy demands that these units export the entire
manufactured product and procure the minimum Net Foreign
Exchange as a Percentage of exports (NFEP) in the prescribed
period. Some of these units are allowed to sell their
products in the Domestic Tariff Area (DTA) provided
they satisfy the DTA sale entitlement, i.e., 50% of
the FOB value. They have to follow the criteria of the
minimum NFEP and also pay the duties whichever applicable.
The Development Commissioner of the EPZ is given the
authority to allow the DTA sale as per the provisions
of the Export Import Policy.
The EOU scheme allows a lot of freedom to the entrepreneur
in choosing the location of his business activity. He
can choose the premises for the manufacturing activity
provided it abides by the location policy prescribed
by the government.
The EOUs are not required to obtain
special license for manufacturing the items specified
under the SSI. Also those units that intend to export
the entire products or services such as repair, reconditioning,
etc., are allowed in the EOUs.
The Development Commissioners of the EOUs and SEZs are
given the authority to approve the fresh applications
and also to amend the applications after approval as
per the clauses mentioned in the EXIM policy. This power
of the DCs facilitates the effective functioning of
the units.
Request
a quote
|
