Get to know all about the Free Trade and Warehousing Zone in India with our mini-guide.
The Free Trade and Warehousing Zone in India or FTWZ is an economic policy of the Indian Government. They offer strategic management and logistics platforms for the import-export of goods and services. It aims to encourage ease of doing business, generating investment and trade FTWZs enjoy special economic zone status and are considered foreign territory with regards to compliance and currency. FTWZs are deemed the quintessential global trading hubs that streamline the logistics infrastructure and drive international trade.
FTWZ : International Game Changers
FTWZs are regulated by the Special Economic Zones Act (2005) and Rules (2006) as well as the Ministry of Commerce and Industries. They enable warehousing, trading and all other activities related to these. FTWZs facilitate the partial or phased clearance of imported cargo into Domestic Tariff Areas or DTAs. Similarly, goods moving from DTAs to FTWZs are considered exports and enjoy all accruing benefits. Usually, FTWZs is located within easy access and proximity to transportation hubs, while some have their own rail operations service.
In India, FTWZs are highly competitive, offering state-of-art warehousing and trading facilities. This includes expedited customs clearance, cutting-edge technology and infrastructure, inland container depots and yards, commercial complexes, etc. Companies wishing to operate via FTWZs can do so in one of two ways:
As a Trading Unit: for the purpose of carrying out authorized operations such as trading, warehousing, labelling, consolidation, etc.
As a Service Unit: availing the services of an authorized Trading Unit.
Companies that are registered as Trading Units must be an Indian entity with a nature of the business that includes import-export, trading, shipping, etc. Authorized operations are listed in the Letter of Approval (LOA) which is granted by the Unit Approval Committee. LOAs are valid for five years with the option to extend for another five years.
Several specific activities are allowed to be conducted in FTWZs. These include:
Trading which is inclusive or exclusive of labelling.
Packaging and repacking.
Re-export, resale, re-invoicing of goods.
Warehouse storage of goods for domestic or international clients.
Value add or optimizing activities on goods.
Assembly of complete or semi-knockdown of goods.
FTWZs offer unparallel advantages to international trade. Aside from the reduction in formalities for customs and excise, other incentives include income tax and demurrage costs exemptions. Efficiencies are also increased for logistics, supply chain management and operations, adding to faster turnaround times.
Currently, India has eight FTWZs which can be found at the following locations:
Taluka Panvel, District Raigad, Maharashtra.
Sriperumbudur Taluk, Kancheepuram District, Tamil Nadu.
Moujpur, Bulandshahar, Uttar Pradesh.
Taluka & District Nagpur, Maharashtra.
Chillamaturu Mandal, Ananthapur District, Andhra Pradesh.
Padur, Karnataka.
Thoppumpady Rameswaram Village, Cochin, Kerala.
Ponneri Taluk, Thiruvalur District, Tamil Nadu.
Contact us today to learn more about the Free Trade and Warehousing Zone in India and how you can use it for your business.
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