SEZ DENOTIFICATION A LONG-AWAITED POSITIVE MOVE
This is a long-awaited and positive move for India’s commercial real estate sector. Benefits such as more flexibility in the manner of carrying-out business in SEZs, partial de-notification and ease of transaction between SEZs and DTA (Domestic Tariff Area or non-processing zone) and streamlined process of approval for de-notification, will protect the interest of both developers as well as occupiers of SEZ developments (both existing and under-construction). Partial de-notification should result in a lot of space getting freed-up, which was earlier blocked-out for carrying out domestic business. This will increase the attractiveness of such spaces to a diversified set of occupiers. In the erstwhile SEZ framework, business between occupiers of SEZs and DTA zone (Domestic Tariff Area or non-processing zone) was cumbersome and difficult. However, along with de-notification, transaction between SEZs and DTA is easier. Therefore, occupiers with businesses that engage in exports as well units that cater to domestic clients, will now not be required to locate in separate office buildings. A streamlined process of approval for de-notification will also encourage many landlords to open-up de-notified spaces soon.