Export processing zone
Also called: EPZ · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
An export processing zone (EPZ) is a fenced industrial area where firms can import inputs duty-free, meaning without paying import taxes. In return, they make goods mainly for export. EPZs aim to earn foreign exchange and attract investment by giving exporters a low-cost, low-paperwork base. In India they were the forerunners of special economic zones (SEZs). The SEZ policy came in 2000 and the SEZ Act in 2005.
Example
Kandla EPZ (1965) in Gujarat was Asia's first EPZ. SEEPZ Mumbai followed in 1973. It became a hub for exports of gems, jewellery and electronics.
Don't confuse with
- Special economic zone (SEZ): An SEZ is a larger, later model. Besides duty-free inputs, it offers liberal laws, tax breaks and its own infrastructure. An EPZ was a narrower enclave focused on duty-free export production.
- Export-oriented unit (EOU): An EPZ is a zone holding many firms. An EOU is a single unit that can be located anywhere.
Related concepts
- Labour-intensive industrialisation
- Production-linked incentive
- Phased manufacturing programme
- Design-linked incentive
- Contract manufacturing
- Special economic zone
- Export-oriented unit
- Eight core industries