Asian Supply Chain Solutions has been a pioneer in offering innovative supply chain solutions using the unique Free Trade Warehousing Zones since its inception in India.
FTWZ (Free Trade and Warehousing Zones) is a deemed foreign territory within India where international trading and warehousing is done as per policy of the Government of India (GoI). It was announced in the Foreign Trade Policy 2004-09 to set up Free Trade and Warehousing Zones (FTWZ) to create trade-related infrastructure to facilitate the import and export of goods and services with the freedom to carry out trade transactions in free currency.
On June 23, 2005, the Parliament of India passed the Special Economic Zones Act 2005 and on February 10, 2006, Government of India notified Special Economic Zone Rules 2006. The Free Trade and Warehousing Zones (FTWZ) is a special category of Special Economic Zone and is governed by the provisions of the SEZ Act and the Rules.
FTWZ are deemed Ports as per Section 7 of Customs Act of India and are envisaged to be integrated zones and to be used as International Trading Hubs where domestic as well as foreign entities can hold stocks for trading or warehousing. FTWZ are the only zones where government of India allows repacking and relabelling without the need for a separate license or registration.
Asian’s majority of business is through the Free Trade Zone at Panvel, Mumbai, Maharashtra, India as it’s just 24 km from Nhava Sheva which handles 60% of sea trade of containers from India and also has an international airport in close proximity. Other options in Khurja (North India), Mundra (North West India) and Sriperumbudur (South India) are also available.
Benefits of Using FTWZ
| Benefits for Importers | Benefits for Exporters | Benefits for Third Country Trading |
| Working capital saving by Duty Deferment for upto TWO years. No Stamp Duty on imports | Supplies from Indian parties to FTWZ are treated as deemed exports. | Exemption from custom and stamp duty on products imported into FTWZ; meant for re-export out of India |
| Optimise inventory by setting up National Import Distribution hubs. | No GST on supplies from Indian Parties to FTWZ. | Hassle-free re-export process |
| Duty Free supplies to units in SEZ in India. | Export Consolidation possible. | Ideal for Traders who want to mask their source & margins. |
| Foreign Exchange billing | Repackaging & Kitting possible of supplies of multiple suppliers. | Repackaging & Kitting possible of supplies of multiple suppliers. |
| Labelling as per Legal Metrology Act & Drugs & Cosmetics Act | Foreign Exchange transaction capability | Ability to add products sourced from India. |
| Splitting of one consignment to different parties | Ideal for Traders who want to mask their source & margins. | Take benefits of international trade agreements |
| Temporary imports for display or exhibition without duty payment | Increased efficiency through lowered reverse logistics through quality control before dispatch from India | Ability to leverage India’s cost, skill & geographic positioning advantage as a hub for regional/global distribution post value optimizing activities |
| Vendor Managed Inventories (VMI) by Overseas principal holding stocks & offer JIT | Overseas parties can set up their International Sourcing Hubs |
Comparison between Customs Bonded Warehouse and FTWZ
| Customs Bonded Warehouse | Free Trade Warehousing Zone |
| Cargo can be stored for a period of 90 days without paying Custom duty | Cargo can be stored for a period of 2 years without paying Custom duty |
| Interest on custom duty needs to be paid post 90 days free storage period. | Interest free storage up to 2 years |
| Limited scope for Value additions inside Custom bonded warehouse | Value added services like labeling, repacking & assembling & consolidation allowed. |
| Labeling or repacking will be construed as manufacturing and liable to registration | Labeling or Repacking or any activity in a FTWZ will not attract registration as its an authorized activity. |
| No exemption of Stamp duty on products cleared from Custom bonded warehouse | Products cleared from FTWZ are exempt of stamp duty |
| No part shipment sale to different parties on products cleared from Custom bonded warehouse | Products cleared from FTWZ are allowed for clearance as part shipments wither for India or export. |
| Triple duty bond to be submitted by importer for goods cleared into Custom bonded warehouse | No Triple duty bond to be submitted by importer for goods cleared into FTWZ |
| Customs Duty payable on Inbound Bill of Entry value | Customs duty payable on Outbound Bill of Entry value incase of sale to third party |
To know how we can customise a solution using FTWZ, contact us…