466 SEZ units closed across seven special economic zones
Why in news?
466 SEZ units closed across seven special economic zones in India over the last five years up to FY25.
Key Reasons
- Closures stem from US tariffs curbing exports, policy uncertainties, and withdrawal of fiscal benefits like tax incentives.
- Gems and jewellery sectors saw major exits, dropping from around 500 units pre-2019 to 360 by FY22, hit by pandemic disruptions, better incentives abroad, and productivity issues.
- Additional factors include low FDI due to missing investment protections (unlike Vietnam), negative perceptions, low R&D spending, and competition from other nations.
Performance Trends
- Despite closures, SEZ exports doubled to Rs 14.63 lakh crore in FY25 from Rs 7.59 lakh crore in FY21.
- Investments rose modestly to Rs 7.82 lakh crore in FY25 from Rs 6.17 lakh crore in FY21, amid challenges like low R&D and global competition.​
Challenges Faced
- SEZs struggle with low FDI due to missing investment protections, negative perceptions, and exits in sectors like gems and jewellery, dropping from around 500 to 360 units pre-FY22.
- Government pursues ongoing reforms, including reverse job work policies and stakeholder consultations.​
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