ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Malini L TantriSubscribe to Malini L Tantri

Import Dependency of Special Economic Zones

Critics of the government's special economic zone policy fear that the incentives offered to SEZ units may lead to an increased demand for imports without an equivalent increase in exports. This article analyses the trends in the import intensity of exports of seven conventional SEZs from 1986-87 to 2007-08. Changes in the sectoral composition of exports are mainly responsible for the increased import intensity of SEZ exports, particularly after the new policy was announced in 2000-01. The government thus needs to follow a cautious approach in promoting SEZs under different sectors and redefine the current fiscal incentives to prevent reallocation of investment from domestic trade areas to the SEZs.
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