Indian Special Economy Zones (SOZs)

Once you get on a roll, you just keep rolling. The Indian economy is a perfect example of this rule. On June 5, the Indian government announced that, setting aside protests from farmers and landowners, it had given final approval for 24 SEZs. The Indian are following the Chinese model in this case, of course they are a democracy and have to consider the wishes of their people while the Chinese do not.

Regardless of the political situation, this move will help major Indian companies such as Reliance, Tata, and Wipro. They may end up helping the overall economy (in the final analysis) but are causing a lot of friction within the societies currently. Regardless, they sound pretty cool. For example, the Rewas scheme, located in the Delhi-Mumbai corridor, will have about 200 high-speed freight trains linking trade zones with industrial complexes and ports. SOZ's are tax-free enclaves that are thought to promote trade, and the Indian government believes that they will help provide employment and secure large amounts of foreign investment. It will be interesting to see how things will work out i.e. whether India can pacify its angry, affected population and take advantage of the investment opportunities that such economic actions bring.

Of course, one could argue that too attract investment a country should lower its entry barriers (tariffs and such) and make itself more open, something that the Indians have consistently failed to. However, that is a subject for another post. In the meantime, the development of the SOZs is a positive development indeed.