Special Economic Zones and Warehousing Clusters in Mumbai

India developed federal, state, and private special economic zones (SEZs) to boost foreign investment and encourage manufacturing and exports. Here, India Briefing introduces the benefits of SEZs as well as the SEZs and warehouses that can be found in Mumbai. 

Maharashtra has encouraged a wide array of foreign businesses to set up in Special Economic Zones (SEZs) in the state.  

Foreign companies investing in the state can save up to 20-30 percent of the cost of setting up a production unit through the federal and state tax incentives, customs benefits, and access to facilities such as raw material, banks, and foreign exchange house, among others. 

Some SEZs in the state offer additional facilities and support for investors, such as infrastructure, training, and networking.

Currently, there are 29 operational SEZs in the state. Out of these, seven are located in Mumbai, Navi Mumbai, and Thane. While the federal state SEZ – Santacruz Electronic Export Processing Zone (SEEPZ) SEZ is situated in central Mumbai, most SEZs developed by private firms are concentrated in Navi Mumbai and Thane.

Sector data shows that a significant majority of the SEZs in Maharashtra are information technology (IT), IT enabled services (ITeS), and electronic hardware businesses. This is partly a result of prolonged tax incentives offered to the industry under various government schemes. 

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Below, are the general benefits available for companies setting up units in India’s SEZS.

Federal government incentives available for SEZ developers and SEZ units

India’s SEZ Act, 2005 offers several financial incentives to developers and tenants of SEZs.

In addition, foreign direct investment (FDI) equity caps are not applicable to companies operating from SEZs. The companies are exempted from the requirements of industrial licenses and are allowed to retain 100 percent of their foreign exchange earnings in special export earners foreign currency exchange accounts.

SEZ located businesses are also free to sell goods in the domestic tariff area (DTA) on payment of applicable duties.

It is worth noting for investors that there are many more industry and location-specific provisions, schemes, and incentives available in Maharashtra. Therefore, when considering a new investment in any of the SEZs in the state, it is important for companies to examine each location individually -– various sources and types of support that may be available, depending on the scope of the business.  

SEZ set up by the federal government

There are seven federal government SEZs that were set-up across India before the enactment of the SEZs Act, 2005. Out of these, only one is located in Mumbai – SEEPZ SEZ.

SEEPZ Special Economic Zone

The SEEPZ was established as an Export Processing Zone in 1973, for the manufacturing and export of electronic products, and was converted into an SEZ in 2000.  

The SEEPZ SEZ is situated close to India’s most robust financial center, giving it access to the surroundings region’s existing infrastructure, capital, logistics networks, raw materials, and labor markets.

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Spread over 45 hectares, the SEZ is dedicated to electronic products, as well as gems and jewelry. It houses seven standard design factories and three gems & jewelry factories, accommodating over 28 IT hardware units, 66 IT software units, 168 gem and jewelry units, and 33 trading units. The jewelry companies together account for 38 – 40 percent of India’s total jewelry exports.

Businesses situated in the SEEPZ have access to various facilities such as banks with ATM, post-office, public telex office, central warehouse, as well as point-to-point dedicated data communication facilities.

In addition, units in the SEZ are entitled to certain tax benefits such as:

• Tax holiday as per the provision of the Income Tax Act, 1961;
• Duty-free import of capital goods, equipment from preferred sources, raw materials, components, consumables, spares, tooling and packaging materials;
• Exemption from excise duty and other levies on products manufactured within the zone; and
• Excise duty exemption on capital goods, raw materials, and computers procured from the Domestic Tariff Area.

There are special dispensations and relaxations in local laws and levies, State Goods and Services Tax (SGST) and property tax. Capital goods and all other inputs supplied to the zone from the rest of the country are treated as deemed exports and are eligible for deemed export benefits under the GST law.

This provision enables companies to avail materials for manufacturing at international prices at zero inventory.

• Distance from Mumbai’s Chhatrapati Shivaji International Airport– 3.7 miles (6km)
• Distance from Andheri railway station – 2.9 miles (4.7 km), Jogeshwari railway station – 3.5 miles (5.6 km)
• Power rate: INR 8.23 and INR 9.31 (US$0.12) per unit respectively
• Water supply: assured supply of 4.6 million liters per day (mld) of water

SEZs set up by private sector

There are 18 notified private sector SEZs situated in and around Mumbai; two IT/ITeS SEZs in Mumbai, six IT/ITeS and biotechnology SEZs in Thane, and 10 sector-specific SEZs in Navi Mumbai.

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Out of these, six are currently operational: 

HGP Community Private Limited SEZ

The SEZ is located in the central suburbs of Mumbai – Powai. It houses several major IT/ITeS units in India such as TCS, Wipro, CRISIL, Nomura, and Covansys.

• Distance from Mumbai’s Chhatrapati Shivaji International Airport – 3.7 miles (6 km)
• Chhatrapati Shivaji Terminus railway station – 15.5 miles (25 km)
• Mumbai central railway station- 13.6 miles (22 km)

Sunstream city private limited SEZ

Sunstream city project is situated off the Eastern Express Highway at Mulund-Thane region of Maharashtra. The SEZ is spread over 141 acres and comprises of IT SEZ and residential township.

• Distance from Mumbai’s Chhatrapati Shivaji International Airport – 10.2 miles (16.5 km)
• Kurla railway station – 10.8 miles (17.5 km)
• Mumbai central railway station- 18.1 (29.2 km)

Other private SEZs are: iGate Global Solutions Limited, Aurum Platz IT Private Limited, Serene Properties Private Limited, and Gigaplex Estate Private Limited.

Warehousing clusters in Mumbai, Thane, Navi Mumbai

The high concentration of SEZs and establishment of manufacturing hubs across Mumbai have augmented the attractiveness of warehousing and industrial clusters in the region. Some of the region’s major warehousing centers are given in the table below. 

Bhiwandi, situated on the outskirts of Mumbai, is the largest warehousing location in the region. It is located along the Mumbai-Nashik highway giving distributors easy access to both Mumbai and Pune. It is also close to Maharashtra – Gujarat border. In the last five years, Bhiwandi has emerged as a major warehousing hub for companies such as Amazon, Samsung, BMW, and Flipkart. The area generates a business of INR 20,000 crore (US$2.8 billion) every month, according to industry estimates.

Panvel is located in close proximity to the Jawaharlal Nehru Port Trust. The connectivity to one of India’s largest ports and availability of large land parcels in the area has made Panvel a popular choice for warehousing among businesses. 

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