Reforms in Special Economic Zones in India – Dawn or Doom

The investors in Special Economic Zones of India are looking forward to year 2020 with much uncertainty. The reforms in policies regarding Special Economic Zones were under reconsideration after the Baba Kalyani led Panel, which was set up by Government of India, submitted its report. The Panel had recommended that SEZs be converted into Employment and Economic Enclaves. It laid emphasis on employment, value addition and dispute resolution. Meanwhile, the World Trade Organisation reported that Export subsidies in Special Economic Zones of India are in violation of the multilateral norms committed by India. India has preferred an appeal over this decision and the same is pending before the Appellate Authority. In addition, certain benefits provided Special Economic Zone Scheme are scheduled to expire on March 31, 2020. A combination of these factors has made 2020, an uncertain for the investors. In light of the above, the objective of this paper is to answer the question what can be reasonably expected by Investors in Special Economic Zones of India in coming years and to provide recommendations to investors to take reasonable caution and to policy makers to make India attractive to investors