The SEZ scheme introduced by the government of India in April 2000 has its genesis in the export processing zone (EPZ) which was introduced way back in 1965 when the first zone was set-up in Kandla. All the EPZs were converted into SEZs.

SEZs generate employment for skilled, unskilled labour and for women workers employment creation generates incomes and also improves the quality of life of labour and enhances their productivity. SEZs also provide foreign exchange earnings and accelerate investment activities. SEZs offer a highly conductive investment climate to attract FDI by making up for infrastructural deficiencies and procedural complexities that characterize developing countries.