NASSCOM welcomes FTP thrust on changes in SEZ rules

NEW DELHI, INDIA: National Association of Software and Service Companies (NASSCOM) today welcomed the annual supplement to the Foreign Trade Policy (FTP) that aims at enhancing exports and easing export procedures.

NASSCOM has been working closely with the Ministry of Commerce to identify specific requirements in the SEZ policy to make it more effective for the IT-BPM sector.

Som Mittal, president, NASSCOM said, "We are delighted that the government recognizes IT exports as a key growth driver for India‟s exports and the SEZ scheme. Removing the minimum land requirement and reducing the built up area will enable the SEZ scheme to realise its true potential."

Large mandatory land requirements made it difficult for small companies to take advantage of the SEZ policy.

Waiving away land requirement and reducing minimum built up area will now make it feasible for IT SEZs to come up in Tier II/Tier III locations. These changes are likely to make the SEZ policy more inclusive by attracting SMEs to consider their options, said NASSCOM.

In the absence of a clear exit policy, several SEZ units have found it difficult to exit their current operations and some of their facilities have been lying unused, with locked in capital and unutilized equipments.

The proposal to include an exit policy is a welcome step and NASSCOM is grateful that some operational difficulties highlighted during the consultation meetings with the Ministry have been addressed, added NASSCOM.

The policy also extended the facility to work from home to STPI/EOUs etc in order to facilitate IT exports said NASSCOM and further added, while this will offer greater flexibility, there are difficulties in its implementation arising out of security requirements like PPVPN as per DoT guidelines.

NASSCOM will work with the Government to ensure that "work-from-home‟ facility is indeed available and operationalized by companies, when needed.

Mittal added, "We hope that Ministry of Finance will consider removal of Minimum Alternate Tax so that SMEs can truly benefit from this scheme."