Duty free trading hub for MNCs
Free Trade Warehousing Zone (FTWZ)
A Free Trade Warehousing Zone is designed mainly for trading and warehousing of goods. This allows businesses to delay or avoid duty, improving cash flow and flexibility.
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What an FTWZ is
A Free Trade Warehousing Zone (FTWZ) is a special category of Special Economic Zone focused on warehousing, trading, logistics, and re-export activities. FTWZs are treated as foreign territory for customs purposes, allowing goods to be imported, stored, processed, and re-exported with major duty and tax advantages.
FTWZ is a duty-free logistics and warehousing zone that facilitates international trade, storage, and re-export operations in India.
How PORTMATRIX helps
PORTMATRIX supports FTWZ registration.
Key features of an FTWZ
Duty-free storage of imported goods
Customs duty paid only when goods enter the Indian market (DTA)
Re-export without customs duty
Difference between SEZ and FTWZ
| SEZ | FTWZ |
|---|---|
| Manufacturing & services focus | Warehousing & Trading Focus |
| Export production | Import / Export Storage & Distribution |
| Industrial Operations | Logistics & Supply Chain Operations |
| Broader Economic Zone | Specialized Logistics Zone |
Value-added services allowed
- Labeling / relabeling
- Repacking / packaging & repackaging
- Kitting / assembly of kits
- Assembly
- Palletization
Other features
- Faster customs clearance
- Foreign currency transactions permitted
- Treated as foreign territory under customs law
Activities allowed in an FTWZ
- Warehousing
- Trading
- Re-export
- Quality inspection
- Refrigerated storage
- Inventory management
How the FTWZ process works
Foreign Supplier
Import into FTWZ with the guidance of PORTMATRIX
Duty-free Storage
Value Addition / Packaging / Labeling
Then, goods go one of two ways:
- Re-export → No duty
- Sale in India → Duty paid only at clearance
Benefits of an FTWZ
For importers
- Deferred customs duty
- Reduced working capital blockage
- Faster supply chain movement
- Lower port demurrage costs
For exporters
- Re-export without import duty (Merchant Trade Transactions-MTT)
- Export benefits available
- Long-term storage flexibility
For global traders
- No permanent establishment required in some cases
- Foreign suppliers can store inventory in India
- Multiple ownership transfers allowed within FTWZ
FTWZ legal framework in India
FTWZs are governed under:
- Ministry of Commerce and Industry
- Special Economic Zones Act 2005
- SEZ Rules 2006
- Foreign Trade Policy (FTP)
Frequently asked questions
- What is a Free Trade Warehousing Zone and how does it differ from an SEZ?
- An FTWZ is a special category of Special Economic Zone focused on warehousing, trading, logistics and re-export. An SEZ has a manufacturing and services focus, while an FTWZ has a warehousing and trading focus.
- When is customs duty paid in an FTWZ?
- Imported goods can be stored duty-free, and customs duty is paid only when goods enter the Indian market (DTA). Goods that are re-exported attract no duty.
- Which value-added services are allowed?
- Labeling, repacking, kitting, assembly and palletization.
- Where is a major FTWZ in Tamil Nadu?
- The source names J Matadee FTWZ at Sriperumbudur, Tamil Nadu.