The export onus for the units, however, has been retained at the existing level of 66 per cent of their total production.

A notification is expected to be issued under the Industries (Development & Regulation) Act, 1951, to give effect to the decision, which also seeks to free the units from excessive procedural requirements.

Earlier, a medium or large-scale EOU/EPZ manufacturing SSI was required to obtain a licence to enter the SSI sector and to achieve an obligation to export 50 per cent of their total output.

Under the current policy, units other than EOUs/EPZs are also required to fulfill an export obligation equal to 50 per cent of their production in order to manufacture SSI items.

Unlike in the past, the government's policy now aims at encouraging establishment of EPZs in the private or joint sector, that is, between the state governments and private agencies or by the state governments themselves.

At present, there are seven EPZs--at Kandla, Santa Cruz, Noida, Chennai, Cochin Falta and Visakhapatnam. Of these, EPZs at Kandla, Santa Cruz, Cochin and Visakhapatnam are being converted into special economic zones (SEZs).

However, the Kandla, Chennai and Faltas EPZs are not being immediately considered for conversion into SEZs because of some reservations expressed by the EPZs. They apprehend that the stipulation of payment of full customs duty on their domestic sale under the SEZ scheme would adversely affect their operations.

As on March 31, 2000, there were 708 EPZs with a total private investment of Rs 1,783 crore These provided employment to 80,000 persons in operation. The government's investment in land and infrastructure on this date was Rs 291 crore.

Total exports by the EPZs increased from Rs 4817.30 crore in 1997-98 to Rs 5252.48 crore in 1998-99 and to Rs 6707.44 crore in 1999-2000 (provisional).

The commerce ministry has introduced several improvements in the EOU/EPZ scheme while unveiling the revised export and import policy on March 31, this year. The EOU/EPZ units with a capital investment of more than Rs 5 crore have to achieve positive net foreign exchange earning as a percentage of exports. The granite sector has been given the facility of taking out duty free capital goods to quarries.

Further, sub-contracting facility has been permitted for all sectors along with the brand rate of duty drawback for domestic units exporting through EOU/EPZ units.