Govt to Disallow IT Companies in SEZ’s at Madras Export Processing Zone (MEPZ)

News Posted - 2010-06-04

MEPZ Special Economic Zone, one of the seven export processing zones (EPZs) set up by the Indian government, has decided not to encourage any more IT companies to set up shop in the zone. The decision comes from the administration to check the growing occupancy by the IT companies in the zone, which was meant to promote the manufacturing sector. The zone administration said soon it would come out with an “incubation scheme” to encourage small start-up manufacturing companies to set up shops in the zone.

MEPZ presently houses IT companies like Cognizant Technology Solutions, Computer Sciences Corporation, CSS, HTC Global Services (India) Pvt Ltd and others are some of the software majors who have occupied space inside the zone, according to the information available in MEPZ’s website. Ajay Mittal, development commissioner, Madras Export Processing Zone(MEPZ), said, “We have taken a decision not to encourage any more IT investments into the zone to protect the manufacturing companies, especially small units.”br>
“They are coming to us since the land price is low. We are advising them to look at private SEZs which are coming up in and around the city to set up their shops,” said Mittal. He added, the zone will soon come out with a new “intubation scheme” which would support small start-up companies. “We will have exclusive space for units which want to set up shop in 2,000-2,500 sq ft.”

The proposed scheme will be the first of its kind in the country which are provided in the SEZs promoted by the government, claimed Mittal. Located in Tambaram, Chennai, the zone was established in 1984 with the objective of promoting foreign direct investment, enhancing foreign exchange earnings, and creating greater employment opportunities. The zone was converted into a special economic zone on January 1, 2003. The objective of the SEZ is to facilitate exports through a reduction in transaction costs.

Source: IRN 3/6/10