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‘We earned Rs. 70,000 crore forex’

At a time when the country is trying to control its current account deficit, it is imperative that the country’s exports rise faster than its imports.
India’s exports figures for the current fiscal period of April- August witnessed an increase of 16.13% over the same period last year however the current account deficit has widened due to an even larger rise in imports (majorly oil led).
It is therefore paramount that the country further aggrandizes its exports in order to surpass the burgeoning imports.
SEZs which play a significant role in enhancing India’s exports are thus seen as an important vehicle for incentivizing companies to come and set up their export oriented units in SEZ. One such crucial SEZ is the Visakhapatnam Special Economic Zone (VSEZ).
With a jurisdiction encompassing not just the state of Andhra Pradesh but of Telangana, Chhattisgarh and Yanam VSEZ plays a crucial role in enhancing the country’s exports.
The Visakhapatnam Special Economic Zone has seen its exports rise from Rs 57789 crores to Rs 70092 crores just in the last 3 fiscals and has garnered an investment of Rs 50799 crores. It has also created employment for more than 290,000 people.
The person heading this crucial zone is a 1987 IFS batch officer Ms Sobhana Kamala Sundarsana Rao. A Kerala cadre officer Ms Sobhana is the Development Commissioner (joint secretary level) of VSEZ, Ministry of Commerce and Industry, Department of Commerce, Visakhapatnam and has been a driving force in making VSEZ one of the most sought after SEZs in the country.
Having worked in various capacities in the Kerala state Ms Sobhana has also worked in the state of Andhra Pradesh as district forest officer, Guntur; Project director, DRDA; Executive director DCSCF corporation in East Godavari and Khammam districts.
In an exclusive interview to Mr. A.K. Sabharwal Ms Sobhana talks to us on some of the important happenings in this zone and its potential going forward.
Edited excerpts of the interview below.

For a better understanding of our readers could you explain the mandate of SEZ’s?
The SEZ policy formulated in the year 2005 intended to make SEZs an engine for economic growth  supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre  and the State level, with minimum possible regulations
The main objectives of the SEZ Scheme are:
(a) Generation of additional economic activity  (b) Promotion of exports of goods and services;  (c) Promotion of investment from domestic and foreign sources;  (d) Creation of employment opportunities;  (e) Development of infrastructure facilities.

How many Government SEZ’s are there in India?
Presently there are eight Government SEZs in India spread all over India each headed by a Development Commissioner. There are 354 SEZs owned by private sector under VSEZ and they all come under my Jurisdiction at VSEZ. Similarly Private SEZs spread all over India come under the administrative control of their respective Government SEZs.

What is the total employment in VSEZ?
We have created total employment for more than 290000 people.

What is your Jurisdiction area
My Jurisdiction is Andhra Pradesh, Telangana, Chhattisgarh and Yanam.
What is the total export of goods & services from all the units under your administration for last three years?
Exports for 2017-18 has seen a rise and the total exports are  – Rs. 70092.36 crores and we see the units are doing well.

What are the main activities of the units in SEZ’s under your Jurisdiction?
As VSEZ is well located globally all types of activities are being undertaken by the existing units such as Computer Software/IT/IT Enabled Services, Pharmaceuticals Manufacturing, Gems and Jewellery etc.

What is the total extent of land area under VSEZ ?
Presently Under VSEZ Total – 11358.192 Hectares of land Is earmarked by Government and as the demand is rising more land can be acquired by VSEZ.

Please name some of the major units in VSEZ
There is a huge list. To name a few Brandix, ACC, Synergies Castings, Divi Laboratories, Pfizer, EISAI, Pharmazell etc etc. (See Chart)

What is the present Income Tax benefit applicable to be SEZ units
Government has given major Income Tax Concessions for SEZ units, At present the IT benefit is available to the SEZ units is as under

First five years 100%
Second five years 50%
Third five year 50 % *

*To invest ploughed profits back into the unit.

Can the units under SEZ also sell their product in domestic market of India or they have to export everything?
Mr Sabharwal (Laughs ) Prime object of the SEZ Policy is to undertake exports to earn foreign exchange.
However the units in SEZ are permitted to sell in Domestic Tariff Area on payment of applicable Duties/taxes and there are no restrictions for clearance to sell in DTA

What is the total staff strength in VSEZ and how many offices you have?
Presently our total Staff strength – Sanctioned Strength – 54 and  Present Strength is 30 No. of Offices – Two (Head office at Visakhapatnam and Sub Office at Hyderabad )

What is the forecast target for exports in current fiscal
As such there is no target fixed. However as per current trends there may be an increase of 10% of exports over the last fiscal.

Are there any special incentives that are being given to units in VSEZ?
The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:-
· Duty free import/domestic procurement of goods for development, operation and maintenance of
SEZ units get 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax
Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.
· Domestic industry is permitted to sell SEZ Units on Zero rated under IGST Act , 2017.
· SEZs can avail Single window clearance for Central and State level approvals.
Other incentives / benefits as extended by respective State Governments as per the Industrial policy are applicable to the units in SEZ.
The major incentives and facilities available to SEZ developers include:-
· Exemption from customs duties for development of SEZs for authorized operations and is approved by the Board Of Approval, Government of India.

Presently what is the land and Built-up area available for rent or lease in VSEZ
Laughs. We have large area available for investors to come and either build or enjoy the readymade facilities.
However details of availability of Space is Vacant Land: 3.68 Ha or 9.11 Acres and Built-up Space : 36,869.68 Sq.Mts. VSEZ is highly suitable for IT Companies with plug & play facilities also.

Can you please explain why government has shelved IT Tower project at VSEZ.
The Construction of IT Tower at SEZ has been proposed for approval/ sanction under ASIDE Scheme. Subsequently with the introduction of new Scheme “Trade Infrastructure for Export Scheme (TIES), the  existing scheme i.e., ASIDE Scheme was replaced by Government with TIES. But some of the sectors  textiles, electronics, IT fall under negative list and hence funds cannot be granted to these sectors  under TIES.
As such the project was stalled at present.

What’s the status of MAT for units? Exporters have been eagerly awaiting for removing of MAT.
Mr Sabharwal I will not speculate on that and I can tell you presently MAT is applicable for all units  in SEZs.

Your message to our readers at Vizag Industrial Scan?
I have been reading Vizag Industrial Scan since I assumed the charge as DC at VSEZ and I find it a  useful industrial publication and wish you and your team Good Luck and all the very best.

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