Special Economic Zones in India

Part of the series India Studies in Business and Economics pp 153-170


SEZs and Other Industrial Clusters: Why Incentives Have Not Been Successful in Developing Manufacturing in India?

  • Arpita MukherjeeAffiliated withIndian Council for Research on International Economic Relations Email author 
  • , Parthapratim PalAffiliated withIndian Institute of Management
  • , Saubhik DebAffiliated withEconomist and Independent Consultant
  • , Subhobrota RayAffiliated withEconomist and Independent Consultant
  • , Tanu M. GoyalAffiliated withIndian Council for Research on International Economic Relations

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The central and the state governments in India have enacted over 300 policies and schemes, most of them for promoting the growth of the manufacturing sector. The majority of the cluster-based schemes can be dovetailed with incentives under the SEZ policy, implying that an investor can avail of the benefits under more than one scheme and/or policy. However, despite subsidies, grants and other incentives, manufacturing has not grown as expected. This chapter examines some of the cluster-based schemes and how these can be dovetailed with the SEZ policy. It also makes policy recommendations on how to support the growth of the manufacturing sector in India.