Export Processing Zone (EPZ) special industrial park developed in response to international market demand for cheaper goods. EPZ is industrial enclaves which are formed in an international custom territory of a country (usually situated near an airport or seaport). The manifest objectives of EPZs are to attract foreign capital investment and mobilize investment for capital formation for rapid industrialization, to create employment opportunities for the country’s manpower, to induce transfer of technology, and to earn foreign exchange by boosting exports. The entire production of such a zone is extended for export, it has economic laws other than the economic laws of the country. Such zones are provided good infrastructure and industrial flats are available at concessional rates.
Objectives of setting up of EPZ:
- Encourage and generate economic development,
- Encourage Foreign Direct Investments (FDI),
- To channel the sources of foreign exchange within the system in a phased manner,
- Foster the establishment and development of industrial enterprises within the said zones,
- Encourage and generate wider economic activities by encouraging foreign investments for the development of the zones,
- To attract foreign investment and earn foreign exchange and Promote technology and create skilled manpower,
- Encourage establishment and development of industries and business enterprises and facilitate with proper infrastructure Generate employment opportunity,
- Upgrade labor and management skills and generate employment, to increase the economic growth of the country
- Acquire advanced technology for increased productivity,
- Ensure world class quality of products.
- The government provides financial help and support to investors, ensures a smooth manufacturing and commercial operation of the firms, and remains vigilant about labor-management relations within EPZ.
Government functions in EPZs include the creation of infrastructure, processing applications for setting up industries, allotment of land or building space, provision of space to local and foreign banks, insurance companies, clearing and forwarding houses, courier services, post offices, etc.