FTWZ in India – What is it?

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FTWZ in IndiaSo you’ve decided to grow your business in India, but do not know how? Do you start from scratch? Or do you choose to go through India’s Foreign Trade Zone (FTZ) process? Whether you’re well-versed in international business and trade or a complete beginner, FTWZ in India may be the best option for your business. In this article, we’ll discuss what FTWZ is, and its benefits. We’ll also touch on how you can get started if this process seems like it might be right for your business.

About FTWZ

Free Trade Zone (FTZ) allows freedom/deferment from customs duties & taxes. This helps to increase your working capital thus building an opportunity cost.

FTWZ in India provides logistic support to import raw materials which can be used for the functions such as repackaging, kitting, re-labeling, lashing, shrink wrapping, strapping, palletization, bottling, clubbing, quality checking, testing, combination packing, handling, storage of empty containers, etc.

What Is FTWZ

FTWZ (Free Trade Warehousing Zone) is an international concept formulated to promote global trade practices and enhance trade volumes and relationships between nations and offer liberal benefits and convenience to its international trade economy.

It allows importing, exporting to and from India with benefits of duty deferment, tax benefits, cost efficiency, and better distribution channels. It also empowers to re-export goods from India without the burden of Indian duties and taxes that are otherwise levied on goods once brought to India. It offers clearance not only in parts and portions but also with value additions such as re-packing, re-labeling, kitting, palletization, and much more.

Benefits for Foreign Companies Investing Doing Business with India

When a foreign supplier do their business with FTZ, they get several benefits – Some of them include –

  • Duty Deferment
  • GST Exemption
  • Foreign Exchange Capability
  • Increased Efficiency through lowered reverse logistics
  • Many other Export Benefits

Cost-Benefit Analysis

Let us do the simple maths – The value of the cargo that you are bringing into India is 1 cr on which there is a 30% Customs Duty, by stocking those goods inside the FTWZ you upfront saved the 30 lakh that otherwise levied on foreign trade procedure. That deferred duty could be used as a working capital or opportunity cost for your business and could give you more ROI.

The custom duty needs to be paid only when goods are sold in DTA (Domestic Tariff Area) which means you can clear your cargo on parts and portions as per the market demand. Moreover, the re-export of the cargo is also duty-free.

Final Words

FTWZ has been successful in countries just like Dubai and Singapore as many complex cases are solved inside these facilities. Companies are not only optimizing their supply chain but also bringing efficiency to their whole trade by Free Trade Warehousing Zones.

You also need to know the Benefits of Foreign Trade Zones (FTZ). To know more click on Foreign Trade Zone logistic Warehouse Benefits for Merchants

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