Start building your factory in 15 days!

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Chirag Patil​​, MBA 2015-17​​,​ ​Vinod Gupta School of Management, IIT Kharagpur​

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Special economic zones are not new to this country. But for the first time Tata group has entered into this space. Continuing its relationship with Odisha, Tata plans to invest Rs. 2000 cr in the state. For Make in India to succeed, we need SEZs to succeed. One of the major concerns of foreign investor is the land acquisition. With such initiatives and promises of clearing the red tape in 15 days, many investors such as UK-based Meggitt are extremely happy.

The effectiveness of SEZs is heavily debated for last 40 years. While they were hugely successful in Singapore, Hong Kong etc, they have failed miserably in Egypt, Tunisia etc. India draws its inspiration from China, where SEZs have been fundamental in the country’s economic growth story. India has around 45% uncultivable land, which gives a reason for the government to push for SEZs. SEZs are permitted to specialize in a particular industry or house multiple industries. Under the SEZ Act of 2005, it can be set up by the central or state government, the private sector or a joint collaboration between the two.

Mahindra World City, located in Tamil Nadu, is the India’s first operational SEZ. It is a multi sector SEZ that caters to IT, Auto and Apparel sectors. Before the Act, establishing a 100% subsidiary in India took couple of trips to Delhi and at least 9 months, but with The World City coming into the picture, it took barely 2 months of time. With its domestic rival cementing its position as the initiator of SEZs in India, can TATA be left far behind?

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