<center><b>14th International</b></center>
  <center><b>Special Economic Zone Investment Summit - Online</b></center>
  <center><b>- The Reset of Globalization and Rising India Opportunity -</b></center>
  <center><b>August 28, 2020</b></center>
  <center><b>Brief Report</b></center>
  <p style='text-align:justify;'>
  ASSOCHAM organized 14th International Special Economic Zone Investment Summit - The Reset of
  Globalization and Rising India Opportunity on August 28, 2020. The discussions were moderated by Shri
  Hitender Mehta, Co-Chairman, National SEZs Council, ASSOCHAM. Theme address was given by Shri
  Ravindra Sannareddy, Chairman, National SEZs Council, ASSOCHAM. Other key Panelists included Shri
  Alok Vardhan Chaturvedi, Director General, Export Promotion Council for EOUs & SEZs; Shri Srikanth
  Badiga, Member, Central Governing Council, Export Promotion Council for EOUs & SEZs; Dr. L B Singhal,
  Former Development Commissioner, SEZs;   Rama Mohan Reddy, Development Commissioner,
  Visakhapatanam SEZ;   Huw LLewllyn, Head of Property, Admiral Group Plc, UK; Shri Jasveer Singh,
  Chief Business Officer, ARISE Integrated Industrial Platforms, Shri R Muthuraj, Development
  Commissioner, Sricity SEZ; Shri Indranil Dasgupta, CEO, Attivo Economic Zones Pvt. Ltd.; Shri Loknath
  Nadar, Business Head - ORIGINS by Mahindra World City, Ahmedabad.
  </p>
  <p style='text-align:justify;'>
  Shri Sannareddy mentioned that there are nearly 5,400 SEZs today, more than 1,000 of which were
established in the last five years. Globally, SEZs are equipped with efficient infrastructure, quality services,
a favorable business environment, few regulatory restrictions, and a minimum of red tape. They are set up
to generate a circular and cumulative growth process that requires two-way linkages between SEZs and
the wider economy. India, as a country is endowed with rich and varied resources coupled with a strategic
location in the South Asian region and has a vast coastal boundary enabling it to achieve a pivotal role in
serving the global economy. The SEZs aim to create more public-private partnerships and thereby resulting
in the development of world-class infrastructure, augmenting economic activity, enhancing exports and
creating employment opportunities. In essence, these zones are self-contained and self-integrated zones
having their own infrastructure and support services. Now, in the post COVID19 scenario, India is picking
up pace to re-start the economic activities and welcome global investors to set up their business in Indian
SEZs, as there is a ready infrastructure and single Window mechanism for all business operations.
  </p>
  <p style='text-align:justify;'>
    Srikant Badiga, informed that in the global perspective there should be one country one policy for
  exports in India and we should have one particular SEZ act like one country one tax. He added,''We should
  not confuse the investors with various export schemes. We should bring exports under one authority for
  smooth implementation and faster decision-making. The main intention to develop SEZ is the
  manufacturing industry as we can learn from Sri City and we should develop similar more SEZs in the 
  country. A smaller country like Poland has come up with export policy and incentives. India is a wonderful
  country with natural resources, human talent, and infrastructure development''. 
  </p>
  <p style='text-align:justify;'>
  India has a large population and a manufacturer has a dual advantage as they will have an option for sale
  from India and sale in India because of geographical positioning of Far East, Middle East and Europe also.
  Some of the US Companies which are based in China are moving out, they should be attracted to
  investments in India as nearby countries Korea, Vietnam, Cambodia, Thailand, Philippines are giving
  competitions for attracting investments.
  </p>
  <p style='text-align:justify;'>
  India has a large population and a manufacturer has a dual advantage as they will have an option for sale
  from India and sale in India because of geographical positioning of Far East, Middle East and Europe also.
  Some of the US Companies which are based in China are moving out, they should be attracted to
  investments in India as nearby countries Korea, Vietnam, Cambodia, Thailand, Philippines are giving
  competitions for attracting investments.
  </p>
  <p style='text-align:justify;'>
    Alok Vardhan Chaturvedi mentioned that ''it is true that the Globalization has been reset and the wave
  of trade liberalization has slowed down. Every economy is trying to protect its market for its own producers
  and trying that they should export to other economies. Fear of job losses or actual job losses, especially in
  manufacturing, has taken over the advantages accrued to consumers and people because of liberalisation.
  From the end of the Second World War, tariffs followed a downward trend that leveled off in both advanced
  and emerging market economies during the first part of the 21st century, before starting on an upward
  trajectory again in the recent years''.
  
  </p>
  <p style='text-align:justify;'>
  The use of regulatory measures and non-tariff barriers such as export subsidies, restrictions on licensing or
  foreign direct investment, and domestic clauses in public procurement, has increased, leading to an overall
  surge in trade distortions. According to data from the Global Trade Alert database encompassing traditional
  and non-traditional trade measures, the number of new discriminatory actions announced by G20
  economies has risen steadily since 2012 and surged further in 2018 onwards. Anti-dumping measures and
  import tariffs were the two most widely used instruments, together accounting for around 30 per cent of all
  of the measures imposed. The use of indirect measures, such as state loans to exporting companies, has
  also increased gradually. The rise in protectionism implies that a progressively larger share of global trade
  has been affected by trade distortions. Data from the Global Trade Alert database show that by 2017 more
  than 50 per cent of exports from G20 countries were subject to harmful trade measures, up from 20 per
  cent in 2009. Accordingly, trade growth has decelerated more sharply in those sectors in which extensive
  discriminatory measures have been adopted than in sectors that have benefited from trade liberalisation.
  </p>
  <p style='text-align:justify;'>
  Along with these developments, an important thing to note is that public support for trade openness has
  declined, while protectionism has increased globally. Perceptions of the risks associated with open trade
  have added to the broader list of concerns related to globalisation. For example, free trade is sometimes
  believed to have made countries more vulnerable to international crises and spillovers from abroad. Given
  its distributional consequences, free trade is also considered to be a factor behind the rising inequality both
  within and across countries. However, the merits of free trade are also widely recognised. International
  trade allows countries to specialise in the production of goods in which they have a comparative advantage,
  while at the same time enabling consumers to enjoy a greater variety of consumer goods. Empirical studies
  have found that trade openness has led to higher income per capita across countries, spurring productivity
  growth and helping to reduce poverty globally. Nevertheless, the benefits of trade openness and their
  distribution across social groups vary between countries. Factors such as the nature of export
  specialisation, the degree of product diversification, and the quality of a country&apos;s institutions are found to
  be important pre-conditions for the benefits of trade openness to be fully realised. Some have also 
  challenged the benefits of free trade by claiming that "unfair practices" have damaged domestic growth and
  job creation. Free Trade has also been criticized because some of the countries are putting non-tariff trade
  barriers, unfair trade practices and thereby protecting their markets at the same time their companies
  reaping the advantages of free trade and fair practices in other countries. Non-tariff barriers and unfair
  trade practices of some of the countries have distorted free trade and have led to increasing public support
  for protectionism.
  
  </p>
  <p style='text-align:justify;'>
  He further added, "Thus it is true, Globalisation has been reset. Has it provided opportunities to India? For
  what? Exports from India or Investment in India. There are two aspects to it. In the backdrop of US-China
  trade tensions, it was thought that it will provide opportunities to India for exports in both directions -
  exports to China in respect of those products where tariffs were hiked by China on imports from US and
  similarly for exports to US in respect of those products where tariffs were hiked by US on imports from
  China. Products were identified for exports where India has a production capacity and was already
  exporting to other countries. But India had competition from other countries neighboring China for exports
  to US as some of the products of China could be routed through these countries easily by passing the
  higher tariff by US for imports from China. Similarly, in case of exports to China for the products being
  imported from US, there was a competition from rest of the world including Latin America, Europe and other
  countries. It is very difficult to start exporting a new product to China. There is a huge regulatory wall. So
  whether India is able to take advantage of these opportunities - the jury is still out on this.
  </p>
  <p style='text-align:justify;'>
  He further added, "Thus it is true, Globalisation has been reset. Has it provided opportunities to India? For
  what? Exports from India or Investment in India. There are two aspects to it. In the backdrop of US-China
  trade tensions, it was thought that it will provide opportunities to India for exports in both directions -
  exports to China in respect of those products where tariffs were hiked by China on imports from US and
  similarly for exports to US in respect of those products where tariffs were hiked by US on imports from
  China. Products were identified for exports where India has a production capacity and was already
  exporting to other countries. But India had competition from other countries neighboring China for exports
  to US as some of the products of China could be routed through these countries easily by passing the
  higher tariff by US for imports from China. Similarly, in case of exports to China for the products being
  imported from US, there was a competition from rest of the world including Latin America, Europe and other
  countries. It is very difficult to start exporting a new product to China. There is a huge regulatory wall. So
  whether India is able to take advantage of these opportunities - the jury is still out on this.
  </p>
  <p style='text-align:justify;'>
  Second part is the opportunities created because of the rest of the world&apos;s concerns against China in the
  backdrop of COVID-19. As has been pointed at many places, the multinational companies are acting on
  China plus strategy. They want to have production centres located just in China. Even Chinese companies
  may also like to have their bases outside China for the resilience of their businesses. Whether India fits in
  their plans? Again we have competition from neighboring countries of China. They have those
  characteristics which may be of advantages to these MNCs vis-à-vis India. 
  </p>
  <p style='text-align:justify;'>
  Thus for both our own companies exporting to US or China, or foreign companies setting up their bases in
  India, we have competition from China neighboring countries. Our environment for our own companies and
  also for foreign companies has to be better than those China-neighboring countries in every respect. All
  factors of production - labour, cost of credit, cost of energy, logistics, regulatory costs, etc. have to be
  better than those countries. 
  </p>
  <p style='text-align:justify;'>
  It is heartening to note that Government is trying in all these directions. India&apos;s WB Ease of Doing business
  rank has improved to 63 in 2019 among 190 nations from 142 in 2014. India&apos;s impressive progression in
  the Doing Business rankings over the past few years is a tremendous achievement, especially for an
  economy that is as large and complex as India&apos;s. Special focus given by the top leadership of the country,
  and the persistent efforts made to drive the business reforms agenda, not only at the central level but also
  at the state level, helped India make significant improvements. India&apos;s rank in World Bank&apos;s Logistics
  Performance Index improved from 54 in 2014 to 44 in 2018.
  </p>
  <p style='text-align:justify;'>
  Recently in July 2020, Government launched the Production Linked Incentive Scheme for the promotion of
domestic manufacturing of critical Key Starting Materials (KSMs)/ Drug Intermediates(DIs) and Active 
Pharmaceutical Ingredients (APIs). Under the Scheme, financial incentives shall be given based on sales
made by selected manufacturers for 41 products covering all the identified 53 APIs. The outlay of the
scheme is Rs. 6,940 crores over the next 6 years. Eligibility shall be subject to threshold investment in
greenfield projects. Similarly, the Production Linked Incentive Scheme (PLI) for Large Scale Electronics
Manufacturing notified on April 01, 2020, offers a production linked incentive to boost domestic
manufacturing and attract large investments in mobile phone manufacturing and specified electronic
components, including Assembly, Testing, Marking, and Packaging (ATMP) units. The Scheme would
tremendously boost the electronics manufacturing landscape and establish India at the global level in the
electronics sector. The scheme shall extend an incentive of 4% to 6% on incremental sales (over base
year) of goods manufactured in India and covered under target segments, to eligible companies, for a
period of five (5) years subsequent to the base year.

  </p>
  <p style='text-align:justify;'>
  Here, SEZs can play an important role. The most important aspect of SEZs is that the country can do all
experimentation in terms of providing world-class infrastructure, best regulatory processes such as flexible
labour policies, environment law, etc which sometimes due to different socio-political reasons and fiscal
constraints, it may not be possible to provide in the entire country. In fact, Special Economic Zones have
been playing the roles of engines of the economic growth of the country and contributing approximately
1/3rd to the national export basket. Exports from SEZs during 2019-20 were to the extent of Rs. 8 lakh
crore - USD 112 Billion, providing direct employment to more than 2.2 million people and attracted
investment of Rs. 5,71,735 crore (USD 70 billion). Exports from SEZs in the first quarter of 2020-21 (AprilJune 2020) were Rs. 1,57,325 crore which is down by 28 per cent as compared to the exports of Rs.
1,81,075 crore during the corresponding period of 2019-20. In the first quarter of 2020-21 Software &
Services exports registered a positive growth of 5 per cent by contributing Rs. 1,11,245 crore. However,
merchandize exports shows negative growth of 45 per cent as compared to the corresponding period of
2019-20
  </p>
  <p style='text-align:justify;'>
  Though Government of India provided certain relaxations and exemptions to SEZs during the lockdown
period and further proposals are under consideration, EPCES has taken up a number of requests of its
members with the government for consideration. After taking over as DG, EPCES, what I have started is
the creation of a google spreadsheet of pending issues of SEZ sector pending with different authorities
which we have shared with the Department of Commerce as a ready-made To Do list for them to follow up
and the status of different pending issues is updated regularly. Some of the major issues are - permission
to sale in DTA on payment of duty waived off during import of raw materials, permission to do job work for
DTA, continuation of MEIS Scheme, MEIS benefits to apparel & garment sector units, exemption from
health cess of 5 per cent on sale of medical product in DTA, Exemption of GST on services rendered and
consumed within the FTWZ, etc. We are regularly following up with the Government authorities. We have to
discuss Baba Kalyani report on SEZs as well with SEZ developers and SEZ units too.''
  </p>
  <p style='text-align:justify;'>
  He added, ''I would also to share with the participants here that EPCES has also launched an online
Contact EPCES services (https://www.epces.in/enquiry-form.php) whereby any unit or developer facing any
difficulty or has any suggestions, he can at any time submit his query/suggestion and he will be given a 
reference number using which he can find out the status of the action taken on his query /suggestions. This
has been done because tracking of emails is rather difficult''.
  </p>
  <p style='text-align:justify;'>
  <b>Dr. L B Singhal</b> said that ''he would like to address 3 questions in the context to The Reset of Globalization
and Rising India Opportunity i.e. Why should an investor whether Indian or foreigner invest in Indian SEZ?
If In SEZ why in India? In post Covid situation what kind of opportunity do we have for encashing? Last
year world investment report was released by UNCTAD, that SEZ as a concept is in 147 countries. There
are 5400 SEZs in operation around the world". He further added, "GST has been implemented in the
country which is the only scheme in the country wherein ab initio exemption from IGST has been provided
whether it's import or domestic procurement. 100 per cent FDI is allowed to the automatic route. Single
window mechanism approval will be given by the board at the Ministry of Commerce''.
  </p>
  <p style='text-align:justify;'>
  <b>  Hitender Mehta</b> moderated the session and also informed that presently, 240 SEZs are operational in
India with an infrastructure development of 40,000 hectare land and availability of 22,000 hectare land for
establishment of new units into SEZs. Indian SEZs provide direct employment to 2.2 million people and 3
times more is the indirect employment due to backward and forward integration. Most of the States in India
have &apos;SEZs&apos; for setting up units in the manufacturing and service sector. The cost of manpower is relatively
low as compared to other countries. Apart from various central incentives, Indian States also offer
incentives for industrial projects. India&apos;s friendly foreign investment regulatory framework, availability of lowcost labour and raw materials, make the SEZs a best case for global investors.
  </p>
  <p style='text-align:justify;'>
  During the interactive session, the distinguished panel of speakers also took questions from the
participants
  </p>
  <p style='text-align:justify;'>
  The Webinar was attended by 340 representatives of the industry.
  </p>
  