In today’s rapidly evolving global economy, nations are constantly seeking innovative ways to attract investment, create jobs, and boost exports. Special Economic Zones (SEZs) have emerged as a cornerstone of these strategies, offering a unique combination of trade regulations and incentives to stimulate economic growth. Inspired by the success of China’s SEZ model, India introduced its own version with high expectations. However, despite significant investments and a host of policy initiatives, India’s SEZ framework has yet to deliver the anticipated economic benefits. This article explores the evolution of India’s SEZ policy, compares it to China’s highly successful model, analyzes the challenges and limitations India has faced, and offers recommendations for reform. By doing so, we aim to uncover how India can recalibrate its SEZ policies to foster more sustainable economic growth in the future.

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This article was originally published in The Indian Business Law Review on 17 March 2025 Written by: Ashoo Gupta, Partner.

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