Free trade warehousing zone

An FTWZ is a special category of special economic zone (SEZ). It can either be a stand-alone FTWZ or a demarcated area within a sector-specific or multi-product-specific SEZ. It is deemed a foreign territory with special status and benefits.

Rhenus India is your partner for FTWZs

Why choose an FTWZ?

  • Offers benefits equivalent to FTZs (free trade zones) operating globally
  • Encourages foreign trade and warehousing activities for overseas and Indian entities
  • Provides an integrated platform for sourcing and distribution of management, including trading (in and out of India) thus reducing operational costs, especially without own set-up
  • Close proximity to international gateways for direct deliveries from port / airport, in turn reducing cargo holding time
  • Ability to move shipments from international gateways to FTWZ swithout customs assessment
  • Operates on a freely convertible currency model, i.e. payment of services in FOREX
  • Provides taxation benefits such as exemption on customs / GST, interest on duty, licensing and compliance of allied acts (while goods are within the FTWZ)

Activities allowed in an FTWZ

  • Storage
  • Handling
  • Transportation
  • WH receipts and documentation
  • Cutting
  • Palletisation
  • Bagging
  • Bubble-wrapping
  • Tagging
  • Packing
  • Labelling
  • Painting
  • Crating
  • Strapping
  • Washing
  • Bottling
  • Quality assurance
  • Consolidation
  • Repairs and maintenance
  • Cartonisation
  • Refurbishment

 

FTWZ benefits

For imports:

  • Flexibility towards end distribution in India
  • Duty deferment benefits (freeing up working capital)
  • Quality control capability prior to duty payment
  • Exemption on SAD, VAT and CST on imports through the FTWZ
  • Hassle-free re-exports in terms of regulatory / duty implications
  • Reduced buffer stock
  • GST exemption on services availed in the FTWZ
  • Lowered product costs
  • Foreign exchange transaction capabilities

For exports:

  • Products from India entering an FTWZ are treated as deemed exports, providing immediate benefits to the suppliers
  • Local tax exemption (e.g. CST, sales tax, excise and VAT, now GST) on all activities conducted in the FTWZ
  • Export quotas can be met for companies exporting into the FTWZ
  • Increased efficiency through lowered reverse logistics and quality control before dispatch from India
  • Foreign exchange transaction capability
  • Increased supply chain efficiencies (forward and reverse) while capital cash flow is enhanced

For re-exports:

  • GST exemption on all activities conducted in the FTWZ including rental and labour
  • Exemption on customs and stamp duty on products imported into FTWZ, which are meant for re-export out of India
  • Hassle-free re-export process
  • Permission of 100 percent FDI for the set-up of units by the unit holder of the FTWZ
  • Ability to leverage India’s cost skill and geographic positioning advantage as a hub for regional / global distribution post value optimising activity

Any questions?

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