Everything You Need To Know about Rashakai Special Economic Zone (RSEZ)

Rashakai Special Economic Zone

Though CPEC was initially focused on supporting energy and connectivity, it promises real success in industrial cooperation. In spite of speculations that work on the $62 billion connectivity project had slowed, the China-Pakistan Economic Corridor (CPEC) is now officially in its second phase.

CPEC phase II was launched with the launch of the Rashakai Special Economic Zone (SEZ) in Khyber Pakhtunkhwa last month. CPEC is planning to establish nine special economic zones between 2017 and 2030, including Rashakai, local to Nowshera. A total of 1,000 acres will be devoted to Rashakai, and for it, China’s Century Steel Pvt. Ltd. plans to relocate to Pakistan as well.

Know About Special Economic Zones

The Special Economic Zones (SEZs) distinguish themselves from the rest of the country by the business and trade laws they enact. Located within the national borders of a nation, SEZs contribute to the reduction of trade deficits, employment growth, increased investment, and job creation. It may be motivated by a desire to attract foreign direct investment for the host country to develop special economic zones.

Pakistan has passed an Act of 2012 containing provisions relating to Special Economic Zones (SEZs) in light of the tremendous success of SEZs worldwide. It provided financial incentives for investments and promoted better infrastructure and provided a framework for growing the economy, enhancing social cohesion and improving an environment, as well as improving public services.

Aside from Gwadar Free Zone, there are total nine SEZs that are planned under CPEC. These special zones include three priority SEZs in Sindh, Punjab and Khyber-Pakhtunkhwa: Dhabeji SEZ, Allama Iqbal Industrial City, and Rashakai Economic Zone.

What is Rashakai Special Economic Zone (REZ)?

Industrial Potential of Rashakai

Pakistan’s beautiful province Khyber Pakhtunkhwa also known as Kpk is set to establish Rashakai Special Economic Zone (REZ) near M-1 motorway Nowshera. There will be three phases to developing REZ’s 1000 acres. There are a total of 702 acres available for industrial purposes in this zone. A total of 159 acres are planned to develop in Phase I, 279 acres in Phase II, and consequently 264 acres in Phase III. An additional 76 acres have been designated for commercial use.

Connectivity Information of REZ

From the Wali Interchange to the zero points of the SEZ there is a road (3.2 km) being constructed (Phase-I). Also, REZ has established connections with all provinces of Pakistan via airport (65 kilometers from REZ), dry port (65 kilometers), railway station (25 kilometers), motorway and highway (5 kilometers) and city center (15 kilometers). Because of the zone’s strengths and its resource pool, fruit & food processors/packagers and textile companies can see a high degree of investment feasibility here.

What is the Industrial Potential of Rashakai Special Economic Zone (REZ)?

In the Rashakai Economic Zone, there will be a variety of commercial properties available. Generally speaking, the SEZ is only going to be available to the following industries:

  • General Merchandize
  • Home Building Materials
  • Garment and Textile Products
  • Electronics and Electrical Appliances
  • Automobile and Mechanical Equipment

A special economic zone is a place where different rules of conduct apply to commercial activities than they do in other areas of the country. Foreign Direct Investment (FDI) zones have a set of laws they enforce that tend to favor FDI. The combination of all these factors, as well as incentives such as tax breaks, can help businesses in these regions operate at a lower cost. Under CPEC’s umbrella, Rashakai Economic Zone is expected to offer both Chinese and Pakistani investors business opportunities.

Know the Importance of Rashakai Special Economic Zone (REZ)? 

Each district of Pakistan has an individual industrial estate with infrastructure. In Punjab, there are 26 industrial estates, 12 in KPK, 7 in Baluchistan, 30 in Sindh, and. The problem with evaluation, however, is that these estates are failing miserably. They have been badly placed in remote areas, and because there are no incentives to move there, a lack of skilled labor and basic facilities plagues these estates.

With Pakistan’s Special Economic Zone Law, the Rashakai SEZ receives a variety of preferential policies from the government and has benefited from favorable tax policies. Moreover, this policy is only available for the SEZ – the only facility in the province earning such a preference. Khyber Pakhtunkhwa province has suffered from problems related to militants in Afghanistan and has been relatively impoverished.

As a result of the Rashakai Special Economic Zone, economic development will be encouraged in the province, and in the long run, regional peace would be introduced through increased trade. According to Mahmood Khan, the chief minister of Khyber Pakhtunkhwa Province, the Rashakai SEZ will create 200,000 jobs in the fields of engineering and food processing, in addition to encouraging business activity in other parts of the province and in Afghanistan.

Due to its proximity to Afghanistan and its connections with Gwadar Port, Rashakai SEZ could give Pakistan the opportunity to export commodities to Afghanistan, as well as other international markets in West China and Central Asia. This can enhance regional security and serve as an interconnection hub. Ultimately, Rashakai will serve as an important economic center for Pakistan – expanding trade opportunities and foreign direct investment and creating wealth and security for the region.

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