An industrial area, frequently situated in developing nations, is established to attract foreign investment and promote export-oriented production. These zones offer businesses incentives such as tax exemptions, simplified customs procedures, and relaxed labor regulations to encourage manufacturing goods for international markets. An example includes a designated area where companies import raw materials duty-free, process them into finished products, and then export them, paying duties only on goods sold domestically.
Such areas play a pivotal role in fostering economic growth by generating employment opportunities, attracting foreign direct investment, and increasing export revenue. Historically, they have been utilized as a tool for governments to diversify their economies, improve competitiveness, and integrate into the global trading system. The establishment of these zones can lead to technology transfer, skill development, and increased productivity within the host country.
