The committee that reviewed India's special economic zone policy in 2018 and proposed turning the zones into employment and economic enclaves was headed by
- A.Bimal Jalan
- B.Baba Kalyani
- C.Arvind Subramanian
- D.Bibek Debroy
Correct answer
Explanation
The correct answer is B, Baba Kalyani. The committee headed by the industrialist Baba Kalyani submitted its report on the special economic zone policy in 2018, arguing that the zones should be judged by the economic activity and employment they create rather than by exports alone, and recommending a new framework of employment and economic enclaves serving the domestic market as well. A is wrong because Bimal Jalan, a former Governor of the Reserve Bank, headed committees on other subjects, including one on the central bank's economic capital framework. C is wrong because Arvind Subramanian served as Chief Economic Adviser and is associated with reports on other questions of policy. D is wrong because Bibek Debroy is known for the committee on the restructuring of the Indian Railways, not for the review of the zones.
Read the full article: Special Economic Zones and Export Promotion in India: GK Notes
Practice Questions
View allAsia's first export processing zone was set up in 1965 at
- A.Santacruz, Mumbai
- B.Kandla, Gujarat
- C.Noida, Uttar Pradesh
- D.Falta, West Bengal
Show answer
Explanation
The correct answer is B, Kandla in Gujarat. The Kandla export processing zone, set up in 1965 beside the port of Kandla, was the first such zone in Asia, and it was later converted into a special economic zone under the Act of 2005. A is wrong because the Santacruz Electronics Export Processing Zone near Mumbai came eight years later, in 1973, and was the second zone in the country, reserved at first for electronics. C is wrong because the Noida zone in Uttar Pradesh was one of the zones set up in the 1980s, well after the first two. D is wrong because the Falta zone in West Bengal also belongs to that later group of zones and was never the first; the examiner usually offers Santacruz as the trap option here.
The Special Economic Zones Act in India was passed in which year?
- A.2000
- B.2003
- C.2005
- D.2008
Show answer
Explanation
The correct answer is C, 2005. The Special Economic Zones Act was passed by Parliament in 2005 and was brought into force in February 2006 together with the Special Economic Zones Rules, giving the zones a single law of their own in place of a chapter of the trade policy. A is wrong because April 2000 is the date of the policy announcement made as part of the export and import policy, not of the Act, and this is the commonest confusion in the question. B is wrong because 2003 saw amendments to the customs and other laws for the zones but no separate SEZ Act. D is wrong because 2008 is later than both the Act and the Rules, by which time zones were already being notified under the new law.
For the purposes of trade operations, duties and tariffs, a special economic zone is treated as
- A.part of the domestic tariff area
- B.foreign territory
- C.a union territory
- D.a bonded warehouse of the state government
Show answer
Explanation
The correct answer is B, foreign territory. The law deems a special economic zone to be outside the customs territory of India for trade operations, duties and tariffs, which is why a supply from the rest of the country into the zone is an export and a sale from the zone into the rest of the country is an import attracting customs duty. A is wrong because the domestic tariff area is defined as the part of India outside the zones, so a zone is precisely what the domestic tariff area is not. C is wrong because a union territory is a unit of the political map administered by the Union, and a zone has no such constitutional status. D is wrong because a bonded warehouse only stores goods on which duty is deferred, and it is licensed under the customs law rather than deemed foreign territory.
Which scheme replaced the Merchandise Exports from India Scheme with effect from 1 January 2021?
- A.RoSCTL
- B.RoDTEP
- C.EPCG
- D.SEIS
Show answer
Explanation
The correct answer is B, RoDTEP, the remission of duties and taxes on exported products. The earlier merchandise exports scheme was held to be inconsistent with world trade rules because it gave an incentive directly on exports, so it was replaced by a scheme that only refunds the duties and taxes embedded in an exported product which no other scheme refunds. A is wrong because RoSCTL, the rebate of state and central taxes and levies, is confined to apparel and made-up garments and came earlier, in 2019. C is wrong because the export promotion capital goods scheme allows duty-free import of machinery against an export obligation and is a wholly different instrument. D is wrong because the service exports scheme applied to the export of services, not of merchandise, and did not replace the merchandise scheme.
The Directorate General of Foreign Trade functions under which ministry?
- A.Ministry of Finance
- B.Ministry of Commerce and Industry
- C.Ministry of External Affairs
- D.Ministry of Micro, Small and Medium Enterprises
Show answer
Explanation
The correct answer is B, the Ministry of Commerce and Industry. The Directorate General of Foreign Trade works under the Department of Commerce in that ministry; it issues the importer-exporter code without which no one can trade across the border, administers the Foreign Trade Policy, and exercises powers under the Foreign Trade (Development and Regulation) Act of 1992. A is wrong because the Ministry of Finance, through the Central Board of Indirect Taxes and Customs, collects the duties but does not license traders or frame the trade policy. C is wrong because the Ministry of External Affairs conducts relations with other countries and has no part in issuing trade licences. D is wrong because the ministry for small enterprises promotes that sector, including its exporters, without any power over foreign trade itself.