Chinese industrial parks to enjoy equal benefits as SEZs, NIMZs
Ending a long wait, India and China have signed the Memorandum of Understanding (MoU) on the creation of industrial parks. The Indian government has accorded them the same status as Special Economic Zones (SEZs) and National Investment and Manufacturing Zones (NIMZs). The MoU was signed in Beijing during Vice President Hamid Ansari’s visit.
The Cabinet Committee on Economic Affairs approved the decision last week. A senior official conceded that this decision would definitely generate criticism and protest. However, keeping in mind India’s need of investment, it was prudent to allow China to produce here, he said.
Both SEZs and NIMZs enjoy incentives under the Income Tax Act. Both are also exempted from Minimum Alternate Tax (MAT) under Section 115 JB. NIMZs also provide tax incentives to small and medium enterprises under the National Manufacturing Policy.
Under the MoU, an Industrial Park Cooperation Working Group will meet alternately in India and China to monitor the parks.
This proposal for Chinese parks had been earlier mooted by the United Progressive Alliance (UPA) government, in view of the country’s trade deficits.
China is desirous of establishing units related to agro-processing and electronics, which may reduce the wide trade deficit India suffers with China. In 2012-13, India suffered a humongous deficit of $ 40.78 billion, much higher compared to earlier years.
Source: Business Standard
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