The FTWZ (Free Trade and Warehousing Zones) are the special category of Special Economic Zones, which are 'Sanitized' zones designated as a deemed foreign territory and are envisaged to be integrated zones to be used as International Trading Hubs. Free Trade & Warehousing Zones (FTWZ) is a policy of the Government of India (GoI). It was announced in the Foreign Trade Policy 2004-09. This division is governed by provisions of SEZ Act 2005 and SEZ Rules 2006 to set up Free Trade and Warehousing Zones so as to create trade related infrastructure and facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency.
Under this FTW scheme, a service enabler can store the goods in FTWZ for a maximum of 5 years, without any penalties or duties. Customs duty becomes payable at the time of clearance of goods into DTA (Domestic Tariff Area). In case of piecemeal, customs duty would be payable on such piecemeal quantity cleared into DTA and not on the full goods received into FTWZ. Therefore, the customs duty can be deferred by importing the goods into FTWZ. FTWZs are fully independent mega-trading hubs integrated with state-of-the-art warehouses and special storage infrastructure, container freight stations, environment friendly equipment, commercial complexes for offices, and eventual residential complex for the FTWZ workforce.