The commerce and industry ministry has asked the finance ministry to work out a fiscal package for offshore banking units in special economic zones in a bid to make these units competitive and attract foreign direct investment.
"We are in consultation with the finance ministry and the Reserve Bank of India to work out a suitable fiscal package for OBUs in SEZs," Commerce and Industry Minsiter Arun Jaitley said after unveiling the Exim Policy 2003-04 on Monday.
Jaitley said RBI has already issued guidelines for setting up OBUs but the fiscal incentive was yet to come.
Terming the SEZs as a the next 'engine for growth,' he said, "We have great hopes for attracting FDI and increasing our exports through this scheme."
Jaitey said 18 SEZs have been notified, but only Indore SEZ is ready to take off as investment required in these projects was close to Rs 10,000 crore (Rs 10 billion).
Moreover there was a delay due to land acquisitions and other legislative hurdles like creation of a single window clearance by states, he said and added that the government had asked states to put in their special legislative framework.
He said the ministry would also explore the possibility of developing a scheme with features similar to SEZ regime, for export-oriented units in select sectors with capital investment in plant and machinery of over Rs 25 crore (Rs 250 million).
The Exim Policy 2003-04