A couple of interesting reasons prompted me to write this editorial on the Special Economic Zones (SEZ) Act 2005. Firstly, the amount of attention it has received, and secondly, the entire logic with which the Ministry of Commerce and Industry is driving the Indian SEZ bandwagon. Though it took the ministry decades to realise the potential of SEZs, the concept finally got kicked off in the year 2005. The bill was passed by both houses in 2005, which eventually was called the SEZ Act. Once passed, the Indian policy makers have decided of approve, hold your breath (!), a staggering 237 SEZs for the country! The logic for such staggering madness: to create an enabling environment for investments and counter China in its own turf, as it is universally believed that those are the Chinese SEZs that are critical reasons for China’s phenomenal economic success and are also instrumental in attracting voluminous FDI to China. But the reality is, the experiment that started in 1979 with four SEZs...
Dr. Arindam Chaudhuri
(An IIPM Think Tank Blog)