What are the benefits of free trade warehousing zone

 A free trade warehousing zone (FTWZ) is Deemed foreign territory within the geography of India for the purpose of tariff & trade.  FTWZ is Special Economic Zone where trading, warehousing & other activities such as packaging, labelling, re-sale, re-export, assembly, trans-shipment are carried out.


FTWZ  is exempt from import and export duties. 


These zones are typically used by businesses to store goods before distribution.


FTWZ unit can hold goods on account/behalf of foreign as well as Indian entities


The facility is ideally suited for foreign entities who do not have an establishment in India but wish to sell their goods in India by retaining title on goods while in storage and subsequently upon finding buyer can sell the goods by invoicing in foreign currency.  All duties and taxes are borne by the buyer upon sale of goods.


The facility can also be used for re-exporting the goods to third countries without payment of any taxes. FTWZ also allows waiver of 100%  on stamp duty (0.1% of goods value including customs).


In India, FTWZs are regulated by the Special Economic Zones Act (2005) and Rules (2006) as well as the Ministry of Commerce and Industries Eight FTWZs are operational in India, located in Chennai, Mumbai, Ananthapur, Padur, Thiruvalur, Cochin, and Bulandshar. 


As stated earlier, FTWZs provide companies with a streamlined, cost-effective way to move goods in and out of a target market. Eliminating tariffs and other trade barriers makes it easier for companies to do business in a foreign market.


Businesses also benefit from FTWZs because of their reduced paperwork, faster clearance of goods, and streamlined distribution. They can offer potential tax benefits as well, as imported goods stored in an FTWZ are not subject to import duty until they are removed from the zone for sale or distribution.


Some key many benefits of having an FTW are: 


  1. Improved efficiency and compliance – By having a designated FTWZ, businesses can be sure that their goods are stored in an approved area and comply with all regulations. Businesses operating in FTWZs can focus on their core activities without worrying about customs clearance and other formalities. This helps to improve efficiency and compliance. An FTWZ is a valuable tool for businesses to improve efficiency and compliance. It is also a cost-effective solution to reduce the time and cost associated with customs clearance. This can save time and resources that would otherwise be spent on compliance checks.


  1. Increased flexibility – FTWZs offer businesses great flexibility, as they are not subject to the same restrictions as other types of warehouses. This can allow businesses to store a broader range of goods, as well as being able to ship goods to and from FTWs quickly and easily. A free trade warehouse could be a great option if you are involved in importing or exporting goods. The benefits of an FTWZ can save your business time, money and resources.


  1. Expand your business- FTWZs can help businesses tap into new markets. By being located in an FTWZ, businesses can reach out to new markets without incurring the cost of setting up their facilities in foreign countries. The advantages of setting up an FTWZ are clear. If you are engaged in international trade, an FTWZ can save you time and money while providing a one-stop solution for all your storage and trading needs.


As one can gather, FTWZs can provide a one-stop solution for businesses engaged in international trade. Rhenus Group India is a trusted partner in the market for providing FTWZ related services. Contact now to get more details.

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