ABSTRACT
Special economic zones (SEZs) are specifically defined duty-free enclaves that are considered to be foreign territory for the purposes of trade operations and duties and tariffs. In order to avoid import substitution strategy, many developing countries (including India) have adopted more external-looking export-oriented industrialisation (Mukherjee 2012a). Formation of export processing zones (EPZs) has been the most prominent feature of this export-oriented development strategy. The concept of SEZs is not new; since the 1960s such zones were formed mainly in Asia. Development of these zones caused economic growth due to increased exports. The economic activities vary in these zones, and mostly undivided zones are specialized in their particular exports. These range from financial services, bonded warehouses or transportation to border trade. Some zones have more advanced projects regarding research and development (R&D). ‘SEZ’ has become a broad term in the sense that it now represents an open area and is not bounded. For example, the single-factory zones like the export-based factories in India or warehouses in Bangladesh can also be counted as SEZs. Some of the activities carried out in SEZs range from initial assembly to even tourist attractions. The figures of the International Labour Organization (ILO) reveal that in total (after continuous proliferation) there are 3,500 SEZs or equivalently, EPZs, in more than 130 countries. The employment statistics are estimated to be 66 million; 40 million out of the total are in China (Boyenge 2007). The first two developing countries which latched on to the idea of SEZs were Puerto Rico (in 1962) and India (in 1965). The 1970s saw a lot of countries take the initiative to establish EPZs including South Korea, Sri Lanka and countries in Latin America, the Caribbean, Africa and West Asia.
