At 33%, SEZ units beat export slump

NEW DELHI: Exports from special economic zones (SEZs) rose 33% during the year to end-March 2009, far outpacing the country���s overall exports growth of just 4%, figures from the commerce department showed.

According to the data, exports from such tax-free manufacturing hubs totalled Rs 89,000 crore ($18.16 billion) last year���or, 10.76% of total exports���up from Rs 66,637 crore ($13.60 billion) a year before.

India���s total goods exports are estimated at $168.80 billion in 2008-09, up from $162 billion in the previous fiscal year. Overall exports have been hit by a steep drop in global trade volumes because of a recession in most developed economies.

���One reason why SEZ exports have fared better than overall exports is that most exporters in the zones are manufacturers. Manufacturing exporters seem to have handled the demand slowdown better than trading exporters,��� said a commerce department official who asked not to be named.

Superior infrastructure in the zones also helped exporters cut costs and remain competitive, the official added.
The past few years of strong economic growth saw several SEZs mushroom across the country, but that pace has slackened in recent months.

While the global trade slowdown has not affected the 87 operational zones and about 120 zones that will start operations by December, developers of new zones are going slow on investments. ���We have received applications from 50 approved SEZs seeking another year���s grace to invest,��� the official said.

Developers have to request for an extension as formal approvals lapse after a year without investments.

Apart from DLF���which has asked for denotification of four of its SEZs���no other developer has sought permission to pull out, the official said. ���This shows that market believes in the growth potential of SEZs. Developers want to wait till the economic situation improves and are, therefore, seeking a longer time to make investments,��� he added.