SEZs in China have been extremely successful with a 40% share of exports, compared to the 4% of Indian SEZs. SEZs were the key drivers of the growth of the Chinese economy in the last two decades. India has much to learn from the Chinese SEZ model. The SEZ Bill, which is a part of the foreign trade policy 2004-2009, is poised to make India a favorable destination for investment.
SEZs have been the growth engines for exports, FDI and industrial growth across many countries in Asia. SEZs have become laboratories for the economic reforms in the past two decades.
In the late 1970s, the Indian and Chinese economies were comparable. But, in the 1980s and 1990s China cruised ahead of India, and today it finds itself at the top in all sectors against India except in software and knowledge-based products. This growth in the Chinese economy is mainly due to the fact that the Special Economic Zones (SEZs) were a part of their open door policy.
In India, SEZs were first planned in the Exim policy 2001 to boost exports. The Indian Government has converted all Export Processing Zones (EPZs), started in the 1990s, into SEZs because they failed to increase the exports. EPZs are small industrial estates, whereas the SEZs are industrial townships offering more facilities and incentives. The intentions of the SEZs are much larger than mere endorsement of export processing zones. After studying the Chinese SEZ model, the Indian authorities have decided to start the SEZs in strategic locations close to port cities and economic centers. The development of 21 greenfield SEZs have already started in the country. |
