FDI, SEZ and Agriculture

  • Sarbajit Chaudhuri
  • Ujjaini Mukhopadhyay


A pertinent policy debate among economists and policymakers in the developing economies has emerged whether the SEZ policy is at all beneficial for a predominantly agricultural economy. The major concerns are as follows: (1) Can industry (SEZs) and agriculture grow simultaneously without hurting one another? (2) Would this policy affect the unemployment situation adversely? (3) How would the economic condition of the workers in the rural sector be affected due to this policy? Since agriculture and industry are the main wheels of such an economy, these concerns need to be addressed first before proceeding further with the SEZ policy. This chapter attempts to provide answers to the above questions in terms of a three-sector Harris–Todaro-type general equilibrium model with an SEZ located in the rural sector. The analysis reveals that agriculture and SEZ can indeed grow simultaneously, and the unemployment problem and the economic condition of the common people may also improve in the process under certain conditions.


Wage Rate Foreign Capital Special Economic Zone Urban Sector Efficiency Unit 
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Copyright information

© Springer India 2014

Authors and Affiliations

  • Sarbajit Chaudhuri
    • 1
  • Ujjaini Mukhopadhyay
    • 2
  1. 1.Department of EconomicsUniversity of CalcuttaKolkataIndia
  2. 2.Department of EconomicsBehala CollegeKolkataIndia

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