India Trade Zone

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This site provides comprehensive information on India Trade Zone. The site also covers the finer details that should be taken into account while doing trade with India, especially tax and labor law issues.

Economic liberalization in the 1990s has witnessed a stupendous rise in India trade. Recently, Indian policymakers grasped the importance of India Trade Zone and have come up with a new set of rules for enclaves that are designed to spur trade by providing businesses with a "foreign" environment free of domestic tariffs. The new regulations, which came into force, are already a big hit. Some of them will have tenants from a variety of businesses; others will focus on single firms or operate in niche areas, such as biotechnology, computer software, textiles or jewelry. Since, the government doesn't have the money to build large India Trade Zone, it's counting on the private sectors for its realization.

The key points of India Trade Zone are highlighted below -
  • The developers building the zones will get a 10-year tax holiday on their profits.
  • Tenants will enjoy tax-free profits for the first 5 years; in the subsequent 10 years, as much as half of their net export earnings will qualify for exemption.
  • Manufacturers, are out of the purview of labor laws.
  • Additionally, state governments can outlaw strikes and legislate the Contract Labor Act of 1970.
  • No contractor may perform any work without obtaining a license.
  • Special economic zones or SEZ offer India a shortcut to shedding its socialist past without wasting its breath on trying to strike off archaic labor laws.
  • States that are bold enough to enact the model law prescribed by the central government and are serious about providing good physical infrastructure - roads, electricity and water - to their special economic zones will get investments and jobs.
  • With more employment opportunities, labor, too, will have a choice. If, underpaid or otherwise exploited in one India Trade Zone, it can move to another zone.

For India to finally make a success of its India Trade Zone the state governments will have to ease not just the labor laws but also many other bureaucratic controls.

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