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Free trade warehousing zones are considered foreign territories, warehouses for storage, and special ports according to Indian customs law. Free trade zones have been put under our country’s unique category of special economic zones or SEZs. 

As per Indian law, foreign companies can establish warehouse units in these free trade zones with a hundred percent FDI or foreign direct investment approval through the automatic method. FTWZ in India is located at many strategic places in India such as Delhi NCR, Mumbai, Chennai, Tamil Nadu, Maharashtra, and Uttar Pradesh to name a few. 

The Minimum Requisites To Setup An FTWZ

To set up or build a free trade warehousing zone, the builder must gain a land area of at least 50 hectares, with half of that area reserved for the appointed processing area. There are exceptions mentioned for the country’s hilly states, other union territories, and Goa State where the requirement is only twenty-five hectares of land for developing a free trade zone. 

The Unique Beneficial Cover of Conducting a Business in a FTWZ

Free trade and warehousing zone units are allowed to handle inventory on behalf of all domestic buyers and foreign suppliers. Moreover, for FTWZ in India, the rules permit multiple ownership transfers typically within the free trade zone, without any goods movement outside that warehousing facility. This planned approach is aimed at maintaining a robust trading supply chain well-connected to prevent any piling of indirect taxes and other regulatory burdens. This approach also helps curtail the spike in transaction costs. 

The warehousing units within the zone have the authority to import goods without paying any duty charges. A free trade zone can store goods and products inside their warehouse and even re-export them minus any duty fees. FTWZ in India are also allowed to obtain goods from the domestic market and they are exempt from any excise duties. This duty fee exemption applies to all goods that are necessary for the upkeep, functioning, and maintenance of the free trade zone. It is thus a win-win situation for the businesses that bring in their goods or products within the free trade zones. 

FTWZ & Related Operations Allowed Inside The Zone 

A free trade and warehousing zone is a special and distinct area built for activities related to warehousing, storage, and trade operations. Within a zone, the below-mentioned activities are permitted as per law:

• Storage of products or goods on behalf of international suppliers meant for dispatch in the local market as per the instruction of the owner (supplier)
• Trading operations including labeling, packing, and repacking without processing needs 
• Utilization of refrigeration systems for storage purposes 
• Assembling activity related to semi or fully knocked-down kits 
• Re-exporting, reselling, or re-invoicing of imported products or goods 
• Permission of trade transactions in foreign currencies 
• Gaining the benefits of indirect taxes when involved in DTA or non-domestic tariff areas sales 

FAQs

Do you feel that it is a perfect time to invest in FTZs in India?

For investing in FTWZ in India, it is the most ideal period for all kinds of business establishments.  There is a pressing need to recognize the usefulness of such free trade zones for facilitating continuous and seamless product movements in and out of India. While most companies have resorted to using Dubai and Singapore FTWZ hubs, these companies can now trust Indian warehousing facilities such as OSV FTWZ.

Without the support of free trade zones, all products that enter Indian territory have to pay duty on the entire packed product before being sent to the respective supply channel partners for selling purposes. Even if the products remain unsold, re-exporting to other countries also requires a duty refund process, which slows down the operations as it is a time-consuming procedure. 

So the basic thought behind developing Indian free trade zones is to cut down on unnecessary duty costs and time spent on the legal procedures. With our domestic FTWZ in India, companies can import products or goods directly into the free trade zones as and when needed. They can then take out the goods for sale into the local market after payment of the customs duty.

If the product or goods remain unsold in the local market, they can be re-exported to other countries without paying tax or duty obligations. Thus companies within the zones can save their time, effort, and costs, the goods are available to them whenever they want and the money is not unduly blocked till they remove them from the zones. 

Should FTWZ facilities be established only in nearby ports?

FTWZs in India are instrumental in offering duty-free import/export operations that help boost the businesses of domestic and international companies. The FTZs in Delhi and Nagpur are located away from ports, and that doesn’t seem to affect business operations. FTWZ facilities can indeed be more profitable if they are situated near the ports.

However, India is a big country and you can also attract location-specific services. The FTZ units at Delhi or Nagpur, which are typically located at the heart of the country are seen to do thriving business. 

What is the crucial role that Onnsynex Ventures plays in facilitating the import/export trade process?

Using our logistics and freight service centers, OSV FTWZ units help in importing products into our free trade zones. Companies are free to take them out of our facilities for sale after completion of customs duty payment and other taxes. Team OSV also helps in the distribution and transportation of goods across the country. Companies wanting to re-export the goods to other countries are also allowed to do so in our warehousing facilities. 

What type of labor or job opportunities can be availed in these zones?

There are plenty of employment opportunities in free-trade warehousing zones. These job activities are dependent on the customer activities. According to government estimates, every free trade warehousing zone should be able to give job-related opportunities for around 15000 to 30000 individuals, directly or indirectly.