Government and Business Case Study

Special Economic Zones in India: Can they Overcome Challenges and Fuel Economic Growth?

OR

Abstract:
The Special Economic Zones (SEZ) Act 2005 was passed with the prime objective of accelerating exports and attracting foreign direct investment, thereby boosting India's economic growth. With the establishment of SEZs for select, crucial industries, India recorded impressive growth in the economy through increased exports and employment generation. However, the journey of SEZs was not smooth and India faced many roadblocks and constraints to establish and expand the envisaged number of SEZs. The major challenge was the difficulty in acquiring land for SEZs as it involved many sensitive issues like population displacement, environmental threat, political dissent and farmers' opposition to part with land. The case focuses on the key favourable factors for the establishment of SEZs, and also discusses the challenges and some instances of protests that stalled plans to set up major SEZs in India.

Pedagogical Objectives:

• To evolution and growth of SEZs in India.
• To SEZ Act and policy initiatives to boost exports and to attract foreign direct investment.
• To challenges in setting up SEZs.

Keywords :  Social issues, Exports, Economic policy of India, Special Economic Zones (SEZ) Act 2005, Environmental issues, Chinese SEZ policy, Political factors, Economic environment, Export industries