Adani Group sought to change the notification of Mundra-based SEZ, an update came from the government

The company, Adani Ports and Special Economic Zone Limited has sought partial cancellation of the notification for its multi-product SEZ in Mundra, Gujarat. There are reports that the Commerce Ministry will consider this proposal on Friday. The Board of Approval, the highest decision-making body for Special Economic Zones (SEZs), will discuss this proposal in its meeting. The board meeting will be held here tomorrow under the chairmanship of Commerce Secretary Sunil Barthwal.

According to the agenda of the meeting, "Adani Ports and Special Economic Zone (APSEZ) Ltd has requested for partial denotification of 333.7396 hectares out of 8282.7670 hectares. Citing reasons, the developer has stated that due to tough competition in the solar market and heavy dumping of solar equipment in India, the units of EMC (Electronics Manufacturing Cluster) are becoming economically unviable within the SEZ." The group has said that it has become necessary for these units to exit the SEZ in order to survive in this tough market.

The proposal said, "The constituent units in the EMC area have expressed their desire not to continue their operations in the SEZ format. Therefore, co-developer Mundra Solar Technopark has requested the developer to de-notify the EMC area from the SEZ on an as-is-where-is basis." The Gujarat government has not raised any objection to the proposal and has requested to process the application for partial denotification. The Development Commissioner of APSEZ has also requested the Board to consider the proposal.

According to SEZ Rules, 2006, the Central Government may, if satisfied, amend the notification of the SEZ, or withdraw or repeal it after the recommendation of the Board on the application made by the developer. Besides, the inter-ministerial board will also consider the proposal for an extension of the LoA (Letter of Approval) of Mundra Petrochem Limited, APSEZ, Mundra for one year.

The agenda of the meeting stated that though LoA was issued in December 2021, due to the COVID-19 pandemic and other issues, the commencement and commissioning of the project were rescheduled; now, the activities of the project are going in full swing.

The Special Economic Zones (SEZs) have emerged as the country's key export hubs and accounted for over one-third of its total exports in the last fiscal. While 'Special economic zones' are considered foreign territories for trade and customs, sales by units in these zones are duty-free in the domestic market, and sales outside the SEZs attract customs duty. The government has given its approval to 423 SEZs, out of which 280 have started operation. There are 5,711 units approved in these properly demarcated enclaves. Exports from SEZs rose over 4 percent to USS 163.69 billion during 2023-24.