A
Free Port ( or Free Trade Zone or Special Economic Zones ) is a port, a port
area or other area with relaxed jurisdiction with respect to the country of
location. Many international air/sea ports have free ports, though they tend to
be called customs areas, customs zones, or international zones. Earlier in history, some free ports like Hong
Kong enjoyed political autonomy.
The
modern free port is an area of a port separated from the customs area of a
nation by a stockade. Ship may enter such a port , discharge, load and depart
without custom formalities. The goods may be stored, repacked, manufactured and re-exported without customs formalities.
Only when the goods pass the barriers to reach the consuming public of the
country do they undergo customs inspection and pay the necessary duty. A free
port is a “customs out land “ within the political boundary of a country.
In
short Free port is a
fenced, patrolled area, not necessarily include the entire port. It is “Free” and “foreign
territory” in respect to application of customs formalities within its
boundaries. It accepts legally admissible
merchandise and the accompanying transportation media from all nations with the
minimum of customs procedures
A Special Economic Zone (SEZ) is a geographical region that has
economic and other laws that are more free-market-oriented than a country's
national laws. "Nationwide" laws may be suspended inside a special
economic zone. The SEZ includes free trade zones (FTZ), export processing Zones
(EPZ), free Zones (FZ), industrial parks or industrial estates (IE), free ports,
free economic zones, and urban enterprise zones.
Though, India experimented with the concept of
Export Processing Zones (EPZ) from 1965 onwards , it did not work out as
expected. Special Economic Zones are a new feature of Indian economic policy
which provide tax-free enclaves for investors from India and abroad. According
to the Prime Minister of India, Dr. Manmohan Singh, “SEZs are here to stay”.
World’s first known SEZ seems to have been an
industrial park set up in Puerto Rico in 1947 to attract investment from the US
mainland. Many other countries, like China, Iran, Jordan, Poland, Kazakhstan, the
Philippines, Russia etc, have been established SEZs successfully.
The main goal of setting up SEZs is to
providing an internationally competitive and hassle-free environment for EXIM
trade. All the import/export operations of the SEZ units are on a
self-certification basis, no routine customs examinations is required. Besides providing state-of-the-art infrastructure and
access to a large, well-trained and skilled workforce, the SEZ policy also
provides enterprises and developers with a favourable and attractive range of
incentives.
