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CS Executive · Economic, Commercial and Intellectual Property Laws · Law relating to Special Economic Zones

Kaveri Electronics proposes a Unit in an SEZ and seeks foreign collaboration with a Singapore partner including foreign direct investment. Under section 9 of the SEZ Act, 2005, which statement about approval is correct?

The Board may approve foreign collaborations and foreign direct investments of Developers or Units in an SEZ, except those exempt from obtaining approval under any law or by the Central Government. This is provided in section 9(2)(c) of the Act.

  1. AThe Board may approve foreign collaborations and FDI for Developers or Units, other than those exempt from approval under any law or by the Central GovernmentCorrect
  2. BOnly the Reserve Bank of India can approve such collaborations in an SEZ
  3. CNo approval is ever needed for FDI in an SEZ
  4. DOnly Parliament can approve foreign collaborations of a Unit

Explanation

Section 9(2)(c) lists granting approval to Developers or Units for foreign collaborations and FDI, including investment by persons resident outside India, as a Board function. Those exempt under any law or by the Central Government are excluded, so approval is not universally needed.

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