SEZ misadventure

Imkong Walling

The push made by the Government of Nagaland to develop business-friendly trade zone(s) along the state’s foothills, at face value and by precedent, holds water. It draws economic legitimacy from a tried and tested formula of drawing foreign investment having found success around the globe, Asia in particular, and falling in line with the Government of India’s policy of promoting Special Economic Zones (SEZ). Neighbouring China and Bangladesh are often quoted as the model success stories. 

India has also made big strides in the SEZ race, beginning in the 1960s, with figures maintained by the Commerce Ministry pointing to a 30 percent jump in “physical exports from SEZs” from Rs 7,59,524 cr in 2020-21 to Rs. 9,90,747 cr in 2021-22. The total investment in SEZs as in June 2022 was estimated to be Rs 6,45,785 cr, including Rs 6,09,036 cr, in SEZs set up after the SEZ Act, 2005.

Now, it would be worth pausing to ask whether Nagaland features in India’s SEZ growth trajectory. The answer, sadly and not surprisingly, is a NO.  Per the Commerce Ministry’s annual report for 2022-23, Nagaland’s two “notified” SEZs were not operational yet. It did not mention the two notified SEZs by name but is apparent it implied the Ganeshnagar SEZ in Dhansiripar, now in Chümoukedima district; and the highly sensitive SEZ along the foothills being the other. 

The latter, as guessed already, the Nagaland Special Development Zone (NSDZ) is still to be demarcated owing to a known bottleneck called traditional land. 

This column, however, chooses not to dwell on the fear and distrust of the tribal hohos over the government’s move. The focus would rather be on a few things deemed essential, besides land, to the development and thriving of special economic zones alongwith a couple of questions to ponder upon. 

Setting aside the issue of land and taxation by the Naga Political Groups, one of the first questions is, “Does Nagaland has the prerequisites for supporting and sustaining a project of such magnitude?” 

One of which would be connectivity, roads to be precise, linking not only the ‘special zones’ but also with places beyond. Can the government be trusted to provide all-weather roads? 

The government would front the long-pending Khelma-Tizit foothills road and maybe, the potential of railway, in its defence. But then, the foothills road has come to a halt despite getting a cool moniker— Trans Nagaland Expressway. 

Electricity is another essential. The government though has been unable to even meet a measly current domestic demand of approximately 180MW (peak). Can the government provide the demands of an SEZ or afford to lose precious revenue by letting the investors buy electricity from other sources? 

There are International Trade Centres, along the border with Myanmar, which are as good as dead. The 50 hectare Ganeshnagar SEZ notified in 2009 has fared no better, while its earlier avatar, as an industrial growth centre, became more a revenue free picnic spot. 

To conclude, there is more to the NSDZ issue than the perceived threat to indigenous land. The kind of governance the people has been catered to over the years and the shared distrust cannot be ignored.  

The writer is a Principal Correspondent at The Morung Express. Comments can be sent to