Special Economic Zone (SEZ) is the advanced concept of Export Processing Zone, and is also called the "Free Trade Zones" which includes Export Processing Zones, Special Trade Zones, Tourism-Entertainment Zones, Information and Technology Parks, Banking etc.

The main objectives of creating "Special Economic Zone (SEZ) are:

• To develop competitive capacity of export oriented goods and services in the international market.

• To attract Foreign Direct Investment (FDI).

• To attract domestic and foreign capital and advanced state of-the-art technology by providing appropriate facility for the industry through one door.

• To widen the export trade all over the world.

Investment on land, infrastructures and other construction by the government and investment by domestic investor/entrepreneurs for setting up units in the zones, maintenance costs and taxes exempted are the costs to the nation while labor return, rental of land and buildings, net income of SEZ administration and supporting agencies including utilities and taxes collectable are benefits to the national economy.

The investors in SEZ are granted permission and administered in all respect of export and import under strictly simplified ~One Window Policy~or one stop service. They have liberal tax regime with exemption to varying degrees in income tax, excise duty, VAT and others taxes and duties. They have facilities of repatriation of investment, immigration, banking, export-import facility, foreign workers employment etc. All relevant services such as custom, banking, insurance, police, fire, medical etc. are at the door. SEZs are governed by liberal production oriented labor law with hire and fire policy forbidding union and strikes. Instead, the labors have wages much higher than outside SEZs, fixed working period and liberal extra benefits and allowances.

Industrial Policy 2011:

The Industrial Policy promotes a vision of a sustainable and broad-based industrial development in an effective and collaborative partnership of public, private and cooperative sectors to support poverty alleviation. 

The policy establishes the following objectives:

1) to increase export of industrial products with growth in national income and employment through enhancement of quality and competitive industrial products and productivity;

2) to increase contribution of industrial sector in the balanced national and regional development by mobilising local resources, raw materials, skills and means;

3) to establish industrial entrepreneurship as a sustainable sector by using latest technology and environment friendly production process;

4) to create strong basis of investment having developed productive human resources and managerial capacity.