Andhra SEZ exports likely to double to Rs 11,200 cr

Special Economic Zones (SEZs) in Andhra Pradesh are expected to witness a two-fold jump in exports to Rs 11,200 crore in the current fiscal on the back of increasing demand in Western markets.

The jump in exports is mainly attributed to a surge in IT exports from these zones. However, while the IT sector currently accounts for the bulk of overseas shipments from these zones, the share of manufactured goods in overall exports is likely to increase to 70% in the next two-three years.

"Today, IT sector is dominating the overall exports from Andhra Pradesh SEZs, but in the coming two-three years, exports from non-IT or manufacturing will be more than the information technology segment," Visakhapatnam SEZ Development Commissioner M S Rao said.

Of the total Rs 8,029 crore worth of exports registered during April-December, 2010-11, more than 50% was contributed by the IT sector.

"Exports from manufacturing sector SEZs like Dr Reddy's, Brandix, Apache Footwear and Sri City are expected to increase, which will push the overall figure," Rao said.

In 2009-10, the shipments were worth Rs 5,554 crore. Of this, the share of IT and electronic hardware exports from the Vishakhapatnam SEZ was Rs 2,726 crore.

The government has approved 109 tax free enclaves in Andhra Pradesh. Of this, 31 SEZs with 311 units were operational as of December, 2010.

Andhra Pradesh has the highest number of SEZs in the country. Out of 74 SEZs notified in the state, 44 belong to the IT sector and the remaining from areas like textiles, pharmaceuticals, biotechnology, gems and jewellery and food processing.

Till date, SEZs in the zone have attracted a cumulative investment of Rs 13,113 crore, including FDI worth Rs 2,478 crore.

In recent years, SEZs have emerged as a prominent contributor to the country's overall exports, which amounted to $180 billion last fiscal.

Under the SEZ Act, units in these zones enjoy 100% tax exemption on their income during the first five years of operation and 50% in the next five years.