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Haven for exporters

Print edition : Jan 27, 2012 T+T-
Workers at a production unit in the Cochin Special Economic Zone.-MAHESH HARILAL

Workers at a production unit in the Cochin Special Economic Zone.-MAHESH HARILAL

THE Cochin Special Economic Zone (CSEZ) is one of the 15 Government of India-owned duty-free enclaves in Kerala meant to promote multi-product exports. It has excellent infrastructure and facilities for fast-track clearances.

Until 2000, when the concept of special economic zones became popular in India, the enclave was functioning as the Cochin Export Processing Zone. Today it is one of the largest employment destinations in Kerala, and is spread over 41.7 hectares at Kakkanad (about eight kilometres from Ernakulam), on the new seaport-airport highway.

SEZs are meant to provide export processing units an operating environment free from legal hassles governing import and export, a liberal regime in respect of levies, domestic regulations and restrictions in order to boost manufacturing and augment exports, earn foreign exchange and generate employment opportunities.

In other words, they are meant to generate additional economic activity; promote exports of goods and services; encourage investment from domestic and foreign sources; create jobs; and develop infrastructure facilities in order to attract foreign and domestic investments.

As far as trade operations, duties and tariffs are concerned, SEZs are considered foreign territory, outside the territory of the Indian Customs department.

There are 98 units now functioning in the CSEZ, in sectors such as electronic hardware and food and agro-products (which together account for the majority of exports), plastic and rubber products, engineering goods, gem and jewellery, textiles and garments, and electronics software. Twenty-three more units are being established.

These units together employ over 11,200 employees and registered exports worth Rs.17,003.53 crore in 2009-10, a growth of 45 per cent over the previous year. In 2010-11, it was the jewellery sector that showed impressive growth, with 93 per cent of share in export, according to initial estimates by the State government.

The CSEZ is strategically located, with the international maritime highway from Europe to the Pacific Rim just 12 nautical miles off Kochi and major international air routes passing over the city. The State government plans to develop a Greater Cochin SEZ by adding on more phases of the SEZ at the Cochin port and Cochin airport, and forming customs-bonded industrial areas along the airport-seaport highway. The inauguration of the Vallarpadam Container Transhipment Terminal SEZ nearby has been a major factor in enhancing the location advantages of the SEZs in Kerala.

Besides operating the CSEZ, the jurisdiction of its Development Commissioner (the designated authority running the enclave) extends to new SEZs being set up in Kerala and Karnataka and also the hundred Export-Oriented Units (EOUs) in Kerala, Karnataka, Lakshadweep and Mahe. Nearly 75 EOUs are in operation in Kerala and 15 more units are being established.

The CSEZ, however, is the only multi-sector SEZ in Kerala, and expansion plans are being mooted in nearby Alappuzha district on 125 acres (1 acre = 0.4 ha) of government land in Cherthala taluk. The policy of the Kerala government allows the development of SEZs on its own, or in the public, private or joint sector.

In addition to eight SEZs notified earlier in Kerala, seven more were notified during 2009-10. Among them were the four SEZs developed by the Kerala State Information Technology Infrastructure Ltd at Kollam, Alappuzha, Pallippuram and Kannur and others by Electronic Technology ParkTechnopark in Thiruvananthapuram, Carborandum Universal Ltd at north Thrikkakkara (near Kochi) and TCG Infrastructure Holding Ltd at Thrikkakkara.

R. Krishnakumar