The Indian Model?

It is fair to say that India has encountered a wide range of challenges in trying to establish SEZs -- not just the deadly violence in Nandigram and elsewhere, but also the the regulatory kinks that continue to need ironing out, the over-ambitious plans that have had to be shelved, and the difficulty of determining whether marginal gains in terms of investment, trade, growth or employment can be attributed to the SEZ phenomenon.

For this reason it may strike some as odd that India has now become an exporter of SEZ expertise. India has agreed to assist Nepal's fledgling government to establish one in a series of planned SEZs, in Birgunj. It is not clear whether the Nepalese authorities are fully cognizant that they may receive an Indian knock-off of a Chinese original. The Indian approach to SEZs -- particularly their limited size, large number, and relatively unplanned nature -- is at variance with many aspects of normal international practice.

Officers of the Government of India also raised the need for Bangladesh to construct new SEZs, presumably with technical assistance from India. This was communicated in the process of conducting the Sixth Joint Working Group Meeting on Trade between the two countries' officials. Quite apart from the oddness of India, which is in fervid pursuit of foreign investment, seeking to promote investment destinations outside India, there is also the matter of Bangladesh's PM having called on Indian industrialists to relocate their operations to existing Bangladeshi SEZs to avoid political troubles of the sort found across the border in Nandigram and Singur.

Note also that the Government of India is not the only channel through which India's experience with SEZ promotion and operation is being disseminated abroad. Through firms that develop and operate SEZs, provide consulting services, or bundle inward investments for SEZ promoters, India's increasingly outward-oriented business culture is finding a receptive audience fort their ideas on how to structure and maintain an SEZ.