The Hindu Business Line : India rebuts world trade body's scepticism on SEZs

SEZs has so far provided direct employment to over 31,000 people and this is expected to rise to one-lakh by the end of the calendar year and to 4 million by the end of 2010.

New Delhi May 25 India today refuted the World Trade Organisation's (WTO) view that called into question the cost effectiveness of the scheme of Special Economic Zones (SEZs) in generating incremental investment and employment as "a little premature".

Responding to the concern expressed by members at the end of the three-day meeting in Geneva as also referring to the WTO Secretariat report on India's trade policy review on the issue, the Commerce Secretary, Mr Gopal K. Pillai, pointed out that "in the 15 months since the SEZ Act and Rules were notified on February 10, 2006, investment of the order of $8 billion have already been made and another $25 billion investment is under way".

Several Delegations

On SEZ's impact on employment, he said that so far over 31,000 people have got direct employment and this is expected to rise to one lakh by the end of the calendar year and to 4 million by the end of 2010. "The large number of textiles, gems and leather SEZs being established would provide employment for a less skilled labour force," Mr Pillai added.

On concerns by several delegations that besides tariffs, India imposes several other taxes on imports, Mr Pillai said that over and above basic customs duties on imports, imported articles are liable to an additional duty which is equal to the excise duty leviable on a like article produced or manufactured within the country to provide a level-playing field to domestic units vis-à-vis imports.

Agricultural Tariffs

Besides, he said, "a special additional duty of customs at 4 per cent has been imposed on imported articles to counterbalance the sales tax, State value added tax, local tax or any other charges leviable on a like article on its sale, purchase or transportations in India. Once again, only to provide a level playing field."

Referring to some members' concern that a large number of tariff lines in India's tariffs schedules are currently unbound, Mr Pillai said that in agriculture, 100 per cent of India's tariff lines (except 2) are bound in ad valorem terms. He said most developed countries continue to maintain a large number of agricultural tariffs with complex and mixed duties. He further said that it is only in industrial tariffs that "we have 25 per cent of tariff lines unbound. Negotiations are on under the Doha Round to bind the remaining tariff lines," he said.

Reform Programme

Mr Pillai also responded to various issues raised by members relating to inflation, agriculture, infrastructure, intellectual property rights regime, regional and multilateral trading arrangements and the country's abiding faith in rule-based multilateral trading system.

He said that India would push ahead with its autonomous, custom-tailored reform programme and would persevere with reform.