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Special Economic Zones Act, 2005

Topics Covered:

  1. Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
  2. Infrastructure related issues.


Special Economic Zones Act, 2005


What to study?

  • For Prelims: What are SEZs? Overview of the legislation.
  • For Mains: Significance of SEZs and challenges faced by them.


Context: The Union Cabinet has approved promulgation of an Ordinance to amend the definition of “person”, as defined in sub-section (v) of section 2 of the Special Economic Zones Act, 2005:

  1. To include a trust.
  2. To enable the setting up of a unit in a Special Economic Zone by a trust.
  3. To provide flexibility to the Central Government to include in this definition of a person, any entity that the Central Government may notify from time to time.


What are SEZs?

Special Economic Zones (SEZs) are geographically delineated ‘enclaves’ in which regulations and practices related to business and trade differ from the rest of the country and therefore all the units therein enjoy special privileges.

The basic idea of SEZs emerges from the fact that, while it might be very difficult to dramatically improve infrastructure and business environment of the overall economy ‘overnight’, SEZs can be built in a much shorter time, and they can work as efficient enclaves to solve these problems.

The SEZ Act, 2005, provides the legal framework for establishment of SEZs and also for units operating in such zones.

For further reference on SEZs Act:,%202005.pdf.