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India may allow offshore banks in SEZs

Beloor S Shanbag in Abu Dhabi

India is likely to allow offshore banks to operate from special economic zones, or SEZs, that various state governments are currently setting up.

Minister for Commerce and Industry Murasoli Maran said that the SEZs "will be considered as foreign territories and there will be no inspector of permit raj."

"We will provide trade and industry in these zones with a hassle-free environment by removing red tape, procedural obstacles and granting total operational freedom," Maran said on the sidelines of a meeting of Indian commercial representatives in the Gulf, Iran and Iraq held in Dubai, before leaving for Cairo.

"Imports and exports into and from these zones will be freely allowed and the government is also thinking of 100 per cent foreign direct investment, or FDI, in these zones in most sectors," Maran said.

"No taxes will be levied on companies setting up base in the SEZs, in case they plan to export them and not sell in the domestic market," he said.

He said that while Gujarat and Tamil Nadu have taken the lead in setting up SEZs under the new Exim Policy, other states which also plan SEZs are Andhra Pradesh, Orissa and West Bengal.

"An existing export processing zone at Kochi in Kerala may also be converted into an SEZ," Maran said.

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