Q. With reference to Special Economic Zone (SEZ), consider the following statements:
1.It is deemed to be foreign territory for the purposes of trade operations and duties and tariffs.
2.All laws of India are applicable in SEZs unless specifically exempted as per the SEZ Act.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C
Notes:

Both statements are correct.

  • Statement 1 is correct: Special Economic Zone (SEZ) is a specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs. In other words, SEZ is a geographical region that has economic laws different from a country’s typical economic laws. Usually the goal is to increase foreign investments.
  • Statement 2 is correct: All laws of India are applicable in SEZs unless specifically exempted as per the SEZ Act/ Rules.

Source: Article

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