Special Economic Zones in India: Public Purpose and Private Property (A)

On March 14, 2007, police opened fire on villagers protesting against a Special Economic Zone (SEZ) being built in Nandigram, a quiet farming community in India's eastern state of West Bengal. Following the enactment of the SEZ Act in 2005, many private-sector investors and state governments in India had been acquiring land to set up these duty-free enclaves that were deemed foreign territory for the purposes of trade operations. Firms were given many regulatory, infrastructure and tax benefits for locating in these zones. The Nandigram SEZ project was a joint venture between the state-owned West Bengal Industrial Development Corporation and Indonesia's Salim Group, which planned to build a major chemical hub. The SEZ required acquisition of more than 14,000 acres of land, mostly under agricultural use. The project, though approved by the government in 2005, encountered significant resistance from local villagers and opposition political parties, which argued that the land had been forcibly acquired by the government at below-market rates. They contended that the SEZ's ambitious plans could displace thousands of farmers…