Infrastructure developer GMR Group plans to set up an airport-based special economic zone near the new Hyderabad International Airport, which it has the mandate to develop.

Planned on the lines of free trade zones in Hamburg and Dubai, the SEZ will house aircraft component manufacturing industries and also see high-end aircraft engineering support activities.

Besides, the SEZ will have high-end electrical and auto-component manufacturing facilities and software units.

The group also has plans to set up high-precision and pharmaceutical equipment-manufacturing to cash in on international air connectivity.

Confirming the plan, a senior GMR executive said the company has already acquired about 240 acres for the airport SEZ.

He added that the Andhra Pradesh government had approved the project and the company was awaiting central government approval.

On rehabilitating former owners of the land, which has proved a problem for many SEZs, the executive said the issue did not arise. The land was acquired in 2003.

GMR Hyderabad International Airport, the company that is implementing the greenfield international airport project, will also be setting up a cargo hub and special bonded warehouses within the airport to tie in with the SEZ.

"There could also be road and rail links to inland container depots and container freight stations in the western region, apart from air connectivity," other sources said.

At present, 11 international airlines and 10 domestic airlines operate from Hyderabad, flying to over 35 destinations.

Industry experts pointed out that an airport SEZ would be a logical extension of the greenfield airport project. Currently, for instance, domestic airlines fly to Frankfurt or Singapore for components.

A component facility within India would help airlines and other industries cut costs.

Elsewhere, Maharashtra Airport Development Company is developing an SEZ at the Nagpur airport.

Cochin International Airport has also approved a 480-acre land utilisation plan for an aircraft maintenance facility, an aviation academy, a golf course, among other things.