Effectiveness of the Special Economic Zone policy over the Export Processing Zone structure in India: trade performance at the aggregate level
Empirical evidence on the effectiveness of recent India's Special Economic Zone (SEZ) policy over Export Processing Zone structure is analysed in this article by aggregating data of seven conventional SEZs from 1986–1987 to 2007–2008. The study reveals that introduction of SEZs in place of its predecessor, the Export Processing Zone, is having a significant and positive impact on its trade performance at the aggregate level. However, in terms of contribution to national trade, the Indian SEZs are lagging way behind the expectations of policymakers. Furthermore, the SEZ policy does not seem to be successful in diversifying the exports basket, which in turn has affected the direction of exports by the SEZs. Moreover, these zones were found to be highly susceptible to external shocks. Thus, we strongly argue in favour of a care in deciding the sectoral choice of SEZs and careful scrutiny of its approval across major Indian states.
The Performance of India′s Export Zones: A Comparison with the Chinese Approach
PART ONE: THE INDIAN CONTEXT Introduction Policy Regime for Export Processing Zones and Export Oriented Units Export Processing Zones Export-Oriented Units Problem Areas and Future Prospects of Export Processing Zones and Export Oriented Units PART TWO: THE CHINESE CONTEXT Special Economic Zones and Economic and Technological Development Zones The Policy Regime Special Economic Zones and Economic and Technological Development Zones Performance, Problems and Potential PART THREE: COMPARISON AND POLICY IMPLICATIONS Foreign Direct Investment Policy in India and China The Role of Expatriates The Relevance of Chinese Development Strategy for India Conclusions and Policy Implications
Export Processing Zones: Past and Future Role in Trade and Development
This paper studies export processing zones (EPZs) which have become increasingly popular as a policy tool for development and export-oriented growth, and can be found in 130 countries around the world. The report consists of four parts. Part I provides a broad overview on the current use of EPZs, including the evolution of EPZ policy, their objectives and how these are achieved, and the incentives commonly offered. It presents case studies from China, India and Russia illustrating new trends and policies. Part II then provides a review of the economic costs and benefits of EPZs with particular focus on their trade and employment implications. Part III presents an analysis of how common EPZ policies relate to trade rules. It reviews the relationship between EPZs and the WTO Agreements such as the WTO Agreement on Subsidies and Countervailing Measures (ASCM), followed by a discussion of how EPZs are commonly treated in RTAs. Part IV concludes. EPZs are a sub-optimal policy from an economic point of view since it benefits the few and distorts resource allocation, but may be useful as a stepping stone to trade liberalisation on a national basis. Governments should consider all available policy options, and conduct a thorough cost/benefit analysis before implementation.