India To Establish National Investment and Manufacturing Zones

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By Sondre Ulvund Solstad

May 1 – The Indian Government has granted in-principle approval for the establishment of 12 National Investment and Manufacturing Zones (NIMZs) throughout India. According to the official press release from the Indian Ministry of Commerce and Industry, India seeks to create industrial townships which will be benchmarked to be the best manufacturing hubs in the world.

The NIMZs are central to the government’s national manufacturing policy, which aims to increase the share of manufacturing to 25 percent of the country’s GDP while also creating 100 million jobs over the next decade. Manufacturing currently accounts for 16 percent of India’s economic output.

The in-principle approval allows for the submission of a detailed application from the relevant state governments for final approval, and then for the acquisition of the land where the NIMZs are to be established.

The Indian government’s national manufacturing policy envisions the NIMZs as “integrated industrial townships with state of the art infrastructure; land use on the basis of zoning; clean and energy efficient technology; necessary social infrastructure; skill development facilities etc. to provide a productive environment for persons transitioning to the secondary and tertiary sectors.”

Ranging from 50 square kilometers to 900 square kilometers, each NIMZ will be much larger than a traditional Special Economic Zone (SEZ), but will retain the latter’s characteristics with flexible rules and regulations.

This move follows considerable governmental enticement of Public Private Partnerships (PPPs) and foreign investments for the construction of the Delhi-Mumbai industrial corridor – a US$10 billion project aimed at  the development of the the infrastructure connecting Delhi and Mumbai – and to facilitate the industrialization of the surrounding regions.

In the construction of these zones, the Indian government envisions a prominent role for the private sector and is planning to provide incentives for infrastructure development funded through PPP.

Eight of the 12 zones will be located in the planned Delhi-Mumbai industrial corridor, two in Andra Pradesh, one in Karnataka and one in Maharashtra.

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