Citizens’ Research Collective on SEZ

Worth skimming. Businessworld.in

Important arguments presented against SEZs:

- that infrastructure will be created only by multiproduct SEZs and will be captive (eg Reliance in Dadri or Jhajjar). Also, danger that even golf courses can come under “infrastructure” as defined.

- investments forthcoming in SEZs - eg POSCO or RIL in Jamnagar or Nokia in TN - would have been made anyway. SEZ certification came later. In other words, the incentives given were not necessary. The benefits of inviting investment are neutralized by the social costs of investment (like tax breaks and legal privileges)

- SEZs biased against small-sector industries who are not so mobile as big business

- In China SEZs were obligated to attract FDI. Not so in India.

- An important economic question raised: will the sale of goods in the DTA be counted in India’s exports or imports? Perils of creative accounting!

- If exports take off, danger of inviting anti-dumping duties by countries importing from SEZs, as the WTO has recently warned GoI.