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Lecture 13

India's Export Promotion Schemes, specifically STPs and SEZs, have significantly boosted the country's global competitiveness, with STPs contributing $15.4B in exports and SEZs accounting for 20% of total exports in 2022-23. The STP scheme, initiated in 1991, offers tax exemptions and streamlined processes for IT and software sectors, while SEZs, established in 2005, provide tax breaks and simplified regulations across various industries. Together, these initiatives have created millions of jobs and supported exports valued at approximately ₹20 lakh crore.

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6 views

Lecture 13

India's Export Promotion Schemes, specifically STPs and SEZs, have significantly boosted the country's global competitiveness, with STPs contributing $15.4B in exports and SEZs accounting for 20% of total exports in 2022-23. The STP scheme, initiated in 1991, offers tax exemptions and streamlined processes for IT and software sectors, while SEZs, established in 2005, provide tax breaks and simplified regulations across various industries. Together, these initiatives have created millions of jobs and supported exports valued at approximately ₹20 lakh crore.

Uploaded by

Raushan kumar Singh
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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India’s Export

Promotion Schemes:
STPs & SEZs
Boosting Global Competitiveness
Real-World Impact of STPs & SEZs
• • Infosys, leveraging the STP model, achieved $15.4B in exports
during 2022-23.
• • SEZs contributed to 20% of India’s total exports in the same period.

• These figures underscore how these schemes are key drivers of global
trade.
STP Scheme: Digital Export Engine
• STP Registration Flowchart
1.Start
1. Begin the STP registration process.
2.Eligibility Check
1. Ensure the unit qualifies for STP registration (e.g., software development, IT services, etc.).
3.Prepare Documents
1. Gather required documents:
1. Application form (Form A).
2. Project report.
3. Memorandum of Association (MOA) and Articles of Association (AOA).
4. Board resolution for STP registration.
5. PAN card, GST registration, and other legal documents.
4.Online Application
1. Submit the application on the STPI portal (https://www.stpi.in).
5.Application Review
1. STPI reviews the application and documents for completeness and accuracy.
6. Clarifications/Corrections (if any)
6. If STPI requests additional information or corrections, provide the required details.
7.Site Inspection
1. STPI may conduct a site inspection of the proposed unit.
8.Approval/Rejection
1. STPI approves or rejects the application based on the review and inspection.
9.Approval Granted
1. If approved, the unit receives an STP registration certificate.
10.Commence Operations
1. Start operations under the STP scheme and avail benefits (e.g., tax exemptions,
customs duty benefits).
11.Compliance
1. Submit monthly/quarterly/annual returns and reports to STPI as required.
12.End
1. Process complete.
STP Scheme: Digital Export Engine
• Since its inception in 1991 by the Ministry of Electronics & IT, the STP
scheme has transformed India's export landscape.

• Key Features:
• • Tax holidays and a streamlined single-window clearance process
• • 100% FDI allowed in IT/ITES sectors
• • Over 600 registered units as of 2023
• • Focus on software development, R&D, and innovation
Why STPs? Key Incentives
• STPs offer a suite of attractive benefits that have made them a
cornerstone of India's export strategy:

• • 10-year income tax exemption


• • Duty-free imports for advanced technology
• • Simplified compliance procedures
• • Robust cloud infrastructure support
• • Enhanced export revenue retention (contributing ~45% to IT
exports)
SEZ Scheme: Trade & Investment
Hubs
• Launched in 2005 under the SEZ Act, Special Economic Zones have
emerged as pivotal trade and investment hubs.

• Highlights:
• • Over 270 operational SEZs as of 2023
• • Significant tax breaks and GST exemptions
• • Boost to export-oriented manufacturing and services
• • Strategic clusters in states like Gujarat and Tamil Nadu
SEZ Advantages for Exporters
• SEZs offer compelling advantages to exporters, including:

• • A 15-year corporate tax holiday


• • Duty-free import and export privileges
• • An FDI framework that requires no additional licensing
• • Simplified labor laws

• In 2022-23, SEZ exports reached an impressive ₹7.5 lakh crore.


Key Differences: STP vs. SEZ
• A side-by-side comparison of the two schemes:

• • **Sector Focus:** STPs specialize in IT/Software, while SEZs cater to


multiple sectors.
• • **Tax Holiday:** STPs provide a 10-year benefit, compared to 15
years for SEZs.
• • **Location:** STPs are typically situated in dedicated parks,
whereas SEZs span larger geographic zones.
Driving Growth & Employment
• Together, STPs and SEZs have fueled significant economic growth:

• • STPs have generated approximately 4.5 million jobs in the IT sector.


• • SEZs have created over 2 million direct jobs as of 2023.
• • Combined, these initiatives support exports valued at around ₹20
lakh crore.
Summary & Next Steps
• In summary, STPs and SEZs are foundational pillars of India's export
growth and economic progress.

• They provide a robust platform for future initiatives such as 'Make in


India' and support for startups.

• Call to Action:
• • Explore case studies (e.g., Wipro's success within an STP).
• • Stay updated on forthcoming policy changes in 2024.
Data Sources
• • STPI Annual Report (2022-23)
• • SEZ India Portal (2023)
• • Ministry of Commerce & Industry

• Visual Suggestion: Include government logos (STPI, SEZ, MeitY) to


reinforce credibility.

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