Nearly a decade after its launch, the Bhairahawa Special Economic Zone (SEZ) is all set to operate at full capacity for the first time. Initially inaugurated in two phases in 2014 and 2016, the SEZ hosts 68 plots, of which 25 plots are already operational, housing 10 industries. Agreements have now been signed to utilize the remaining plots, ensuring the SEZ's full operational capacity.
Acting Executive Director Tulsiram Marasini confirmed two additional industries are under construction at Bhairahawa SEZ.
In Simara SEZ, which comprises 69 plots, only three remain unallocated. Currently, two industries are operational, and two others are in trial production. Five industries are under construction, while agreements have been signed with 14 industries to establish factories. The plots in Simara are steadily filling up, with prominent producers like Baltra and betel nut industries already active.
The government has amended the SEZ Act, 2016, allowing established industries to enter SEZs, spurring increased interest. Notably, Kiran Shoes Manufacturers, producers of the Goldstar brand, have applied to extend their agreement amid uncertainties in exporting shoes to India.
SEZ industries are now required to export at least 15% of their production within the first four years, increasing to 30% in subsequent years. Additionally, businesses can sell their products in the domestic market for up to three years after commencing operations, an extension from the earlier one-year limit.
The SEZ Authority said it is committed to revising its policies to attract businesses, including reducing lease rates, providing loans against project collateral, and offering tax benefits for import-substituting industries. Currently, the land lease rate is Rs 20 per square metre, but businesses have requested a reduction to Rs 5. The Authority has proposed Rs 10 per square metre to the Ministry of Industry, Commerce, and Supplies.
Further policy enhancements are being explored to provide incentives to the industries, including reduced penalties for exports, lower electricity costs, and streamlined approvals. With these measures, both SEZs are poised for further industrial growth.
