Expert opinion on India’s proposed DESH regime

A new legislation is set to replace the Special Economic Zone (SEZ) Act 2005 in India – the Development of Enterprise and Services Hub (DESH) Bill. Project member Prof. Aradhna Aggarwal, who also participated in the consultative meetings on the draft bill at India’s Ministry of Commerce, published her views in an op-ed article in Financial Express last week.

While she welcomes some long-awaited changes in the legislation, she doubts that the new DESH bill could become a game-changer. India’s SEZ policy has largely missed the opportunity to establish the country as a manufacturing or export location in the global economy. A major reason for this is the inability of these policies to address the problem of India’s growth-constraining institutions. In Prof. Aggarwal’s assessment, it is not clear how the new DESH bill could better tackle these institutional challenges.

As a solution, Prof. Aggarwal forcefully advocates the establishment of a one-stop-shop mechanism – a critical means of business facilitation – within the proposed hubs.