DELHI: Foreign investors with major planned investments are getting nervous about the proctracted delays in clearing special economic zones (SEZs) in India .
Several of them, including the Singapore government,Taiwan-based Foxconn and Sri Lanka’s Brandix, have in recent days conveyed their apprehensions to the commerce ministry, say people familiar with the matter. Singapore had proposed to invest $1.5 billion for setting up an SEZ in India, and the government had even set up a steering committee to expedite processing.
Following the high-profile clashes in Singur and Nandigram in West Bengal, between farmers and authorities over acquisition of land for these industrial projects, the Centre had gone on the defensive. It reacted by putting a temporary freeze on fresh clearances and also formal go-aheads for previously approved SEZs.
The go-slow approach could also affect the national industrial corridor planned by Japan at an estimated investment of $6 billion. The 3,000-km corridor includes SEZs, and a highlevel team of officials from Japan is slated to visit India to discuss the status of the project.
The most worrying thing for some of these overseas investors is that there appears to be no timetable to get the SEZ policy back on track. Prior to the current status quo, the government had approved 63 such SEZs. But it had also cleared 237 proposals, which meant the promoters had already started acquiring land. Another 303 applications are pending before the government—including 118 new proposals and 185 cases yet to acquire land.
The group tasked to clear these projects, the empowered group of ministers, has not reconvened since its meeting on 22 January, when they announced the temporary freeze and has not yet set another meeting date.
Amid growing investor worries, a Parliament ary Committee on SEZs consulted state government representatives and developers to solicit ideas on how to move the process forward. At that meeting, representatives from states, such as West Bengal, Gujarat, Karnataka and Maharashtra, pushed for the projects, said people familiar with the meeting.
West Bengal, which has been the centre of the controversy in recent weeks, actually made a strong plea for relaxing the minimum area requirements for SEZs, which will include units from multiple industries. At present, such zones have a minimum land requirement of 1,000 hectares.