“You Say Nano, We Say No-No:” Getting a “Yes” Instead for Special Economic Zones in India

Jain, Sumeet | January 1, 2011

Special Economic Zones (SEZs) have the potential to be valuable in-struments of economic growth and development in India. Yet, as a result of the resistance facing them, SEZs in India have not delivered economic benefits to their fullest potential. For this reason, reducing the resistance facing SEZs is critical to their success. This article seeks to reduce this resistance by devising a consensus-building plan based on a regulatory negotiation approach. The ar-ticle first shows that the past and present resistance facing India’s economic zones is a product of the lack of public input in the design of their policy. It then presents a platform for understanding the proponents’ and opponents’ argu-ments by distilling the current legislation and regulation governing India’s SEZ policy into a cohesive operational framework. Next, the article examines pro-ponents’ and opponents’ arguments pertaining to the operational framework of the SEZ policy. Finally, the article seeks to retroactively counterbalance the lack of public input in the design process of India’s SEZ policy by suggesting two sets of reforms to the operational framework. One set of reforms—procedural reforms—suggests securing greater opponent involvement in the es-tablishment and operation of SEZs. The other set—substantive reforms—recommends rules that will further opponent interests through, not despite, the establishment and operation of SEZs.