Further, the Government is also considering to allow industrial clusters in any region setting up private FTZs in addition to the existing EOUs/EPZs which ultimately will be converted into FTZ after July this year.

The commerce minister Ramakrishna Hegde in his proposals for amendments to the 1997-2000 Exim policy announced on March 31, had indicated that conversion of EOUs/EPZs will become operational from July 1, 1999, so as to boost the sagging exports.

The detailed notification for conversion of EOUs/EPZs to FTZ is expected to be issued by end of thecurrent month. Once announced, the Seepz FTZ is expected to compete with Jabel Ali in Dubai, the FTZs in Singapore and few others in the western countries.

Director General of Foreign Trade (DGFT) NK Lakhanpal, alongwith some of his senior staff members and officials from the commerce ministry visited the Seepz premises on Wednesday. Some of the leading gems and jewellery exporters, having units at Seepz too had accompanied the DGFT.

"We are happy to announce that Seepz will be announced as the country's first FTZ two months before the scheduled time of July," Lakhanpal said

Majority of the units in Seepz have wholeheartedly agreed for the conversion of the EoU to FTZ by May this year, he added.

Under the proposed conversion of EOUs/EPZs to FTZ, the FTZs will be considered to be out of the customs territory of the country, the customs shall be manning only the entry and the exit points. The units will be permitted to carry out any manufacturing or trading activities and not be subjected to anypredetermined value addition, export obligations, input/output/wastage norms.

These units will be allowed to source their requirements, raw materials, from both local and foreign markets free of any levies, including excise duties and sales tax if sourced from the local markets.

"These units will also be allowed to take up warehousing activities for exports," Lakhanpal said.

Queried if the Government will consider extending free conversion of currency for payment to employees in the FTZs or for import export activities, Lakhanpal said "the laws of the land will prevail for all currency related issues. There will be no dilution in this regard."

The resolution to set up the Seepz EoU was passed by the Government on May 1, 1973. Actual exports however, became effective from September 1974.

Currently, there are 156 units in Seepz, of which around 50 are said to be engaged in processing of gems and diamonds, while the majority of the balance units are engaged in electronic hardware and softwareactivities.

Activities at the Seepz premises are monitored by some 30-odd officials from the customs department, headed by development commissioner AKD Jadhav. Barring few, majority of these will have to be redeployed at other EOUs and ports requiring monitoring by customs officials.

Total exports from the Seepz region for the year 1998-99 is placed at Rs 3,112.85 crore.