India has sanctioned close to 200 SEZs while China has 6 major SEZs and the island province of Hainan since starting their SEZ policy in 1979. The author questions if there is something wrong with India's SEZ policy or if India will eventually be as successful as China. Key differences noted are that Chinese SEZs were public funded and provided attractive tax benefits and infrastructure while Indian SEZs encourage private development and India struggles with implementation of labor laws. The largest SEZ in China, Shenzhen, is also much larger in size than India's largest SEZs. The author attributes much of China's economic success to their effective use of SEZs.

2. India has sanctioned close to 200 SEZs.
Guess, how many SEZs China has since kicking off the policy
in 1979?
Five + entire island province of Hainan:
1. Shenzhen
2. Zhuhai
3. Shantou
4. Xiamen
5. Pudong
6. Hainan

3. Is India getting something wrong in its SEZ policy,
or should we merely conclude that India will soon
be 33 times as successful as China?

4.  The Chinese started their liberalization and industrialization with the formation of SEZs in
late 70s, but in India, SEZ is being incorporated 15 years later after the start of
liberalization process.
 Indian SEZ attracts investment in high end human skill based industries and service sector
due to larger english speaking workforce and knowledge based industries like software and
IT enabled services etc.
 Strong domestic demand - In china, about 50% of the SEZ sales are to the domestic
market. Though India has a large domestic market it has failed to project this to lure SEZ
investors.

5. • Chinese SEZ are public funded whereas Indian model encourages private
sector led development.
• China provides an attractive tax environment with world class infrastructure
and liberal labour laws. Whereas India, being a democratic country fails to
implement the labour laws under pressure from labour union. On Ease of
doing business index (source: worldbank.org) India ranks 133 while China
ranks 83.

6. China SEZs was inspired by the
success of Asian Trading Hub,
Hong Kong.
The Chinese started building
massive cities for manufacturing
and industrialization under their
SEZ framework.
All the Chinese SEZs are located
along the coast line.

7. Indian SEZs are mostly concentrated near major cities and more than half are being
developed by Real Estate Companies in order to grab land at cheap prices under
SEZ land acquisition act which is a scam in itself.

10.  Shenzhen is the largest SEZ in China and is spread
over 493 Sq Kms. (49,300 hectares).
 While the largest SEZ in India, Reliance - Navi
Mumbai and Maha Mumbai SEZ, is mere 14,000
hectares.

12. For anybody wondering why China is already an
economic power and Asia’s other giant, India, is
struggling to catch up ??
Consider three letters:
SEZ.