Special Economic Zones (SEZs) are regions that have been set aside in India
with the goal of increasing foreign investment, encouraging export-oriented
growth, and creating job opportunities. SEZs have the ability to increase
economic growth and provide employment, but they can also present serious
difficulties for employees.
Some of the challenges experienced by employees in India's SEZs are:
- Poor working conditions:
Many people who work in SEZs are employed in manual labour-intensive
businesses like manufacturing. These sectors can have difficult conditions
for working, including long hours, few breaks, poor housing arrangements, a
lack of enforcement of occupational health and safety laws, and limitations
on employees' ability to join or establish independent trade unions.
Ironically, there is now no official report on the salary and social
security situation for employees in SEZ enterprises.
- Low wages:
Low salaries that are frequently insufficient to cover workers' essential
requirements are paid in SEZs. Many employees only have temporary contracts;
thus, they are not covered by pensions or health insurance. The Minimum
Wages Act is applied on paper in SEZs; however, workers are never paid,
according to a number of empirical and existing research on SEZs. Only
permanent employees receive the minimum pay in the majority of SEZ units;
the remainder of the workforce, which is primarily made up of contract
workers who do not receive the minimum wage, lives on less than the poverty
line. Wage payments to employees may be made on a daily, monthly, or
piece-rate basis. Companies minimise costs by hiring cheap labour,
intensifying work, and putting more pressure on employees to meet higher
production objectives as they compete in the global market.
- Lack of job security:
Many employees in SEZs have low job security since they are engaged on a
temporary or contract basis. This translates to less job security for
employees than for those in permanent roles. SEZs sometimes have significant
turnover rates as companies relocate their operations to other regions or
nations in pursuit of more advantageous labour or incentive packages. This
causes employment instability for workers who could lose their jobs as a
result of a company closing down or moving. Without warning, employees may
be let go or fired, which can cause stress and a lack of financial
- Limited access to social services:
As a result of the location of many SEZs in outlying locations, employees
have little access to social amenities including transportation, healthcare,
and education. For employees, especially those with families, this might
pose serious difficulties.
- Lack of representation:
The labour market in India, especially in special economic zones (SEZs), is
significantly influenced by trade unions. In order to encourage investment
and exports, India has established SEZs that provide specific incentives and
tax benefits to enterprises. Due to a number of variables, including low
union density, flexible labour regulations, and the presence of
multinational businesses that are less inclined to accept union action,
trade unions have historically been weak in SEZs. However, in certain SEZs,
trade unions have been instrumental in promoting employees' rights and
obtaining improved pay and working conditions.
In India, trade union organisation, registration, and operation are governed
under the Trade Union Act of 1926. The same laws that apply to trade unions
functioning in other areas of India also apply to those working in SEZs. The
2012 strikes at the Maruti Suzuki plant in Manesar, Haryana, are one
significant instance of trade union involvement in SEZs. The unionised
workers went on strike in favour of greater pay and job security.
A senior manager died as a result of the violent demonstrations, and other
workers were detained and accused of murder. Overall, trade unions' power
and participation in SEZs in India are limited, and the government's and
these zones' enterprise policies and practices frequently make it difficult
for them to organise and represent employees.
There have been instances of child labour, forced labour, and human
trafficking among the forms of exploitation of employees in SEZs. This is a
serious worry, especially for groups who are already at risk, including
women and children.
- Gender-Based Discrimination:
Women employees in SEZs frequently face discrimination in terms of
compensation, job responsibilities, and promotions. The majority of women
work as contract workers. The legal protection to which these employees are
entitled under numerous social security legislation is not provided to them.
Studies on SEZs in India show that single females are preferred for
low-paying professions like cutting, checking, and packing as well as for
According to research on working conditions in several Indian SEZs, many
women in Indian EPZs also experience sexual harassment. According to a
fact-finding report on the Falta SEZ in West Bengal, which is about 55
kilometres from the centre of Calcutta city and has an impact on both the
environment and workers, there are no mechanisms in place to address the
grievances of these female workers. Instead, these workers must endure a
life of low pay, ongoing job insecurity, and hazardous working conditions.
- Inability to organize Strikes:
By implementing a policy that classifies economic activity within an SEZ as
a "public utility service," a strike in SEZ units is deemed to be illegal
conduct (according to Section 2 of the Industrial Disputes Act, 1947), which
restricts the capacity of workers to organise strikes. States (such as Uttar
Pradesh) have argued that SEZs are exempt from Section 22 of the Trade Union
Act of 1926, which prohibits or excludes outsiders from holding office in
The creation of trade unions is prohibited, and the New Delhi administration
has exempted SEZs from the majority of labour legislation. The labour
department has been discouraged from inspecting SEZs in Andhra Pradesh.
Employees worry that those who demonstrate will be fired right away. Workers
in the Noida EPZ have been fired for calling for the application of labour
- Shift of Power:
The Ministry of Commerce and Industry in India is responsible for the
creation and management of special economic zones (SEZs). A Development
Commissioner may be appointed by the SEZ Act of 2005 to supervise the
creation and administration of SEZs. To guarantee that labour rules are
followed in SEZs, the Act also allows for the appointment of labour
The authority in SEZs has, however, shifted in recent years from labour
commissioners to development commissioners. Concerns concerning the
preservation of workers' rights in SEZs have arisen as a result of this
change. Businesses operating in SEZs must abide by labour rules governing
minimum pay, working hours, and health and safety requirements. Labour
Commissioners are in charge of guaranteeing this.
There is concern that employees' rights may be in jeopardy as a result of
their authority being reduced. Conflict of interest has resulted from the
power transition from Labour Commissioners to Development Commissioners. The
promotion of commercial interests and luring of investments to SEZs is the
responsibility of development commissioners, which may be done at the
expense of employees' rights.
- Jurisdiction of courts curtailed:
The current criminal and labour courts no longer have as much authority.
Instead, a Special Court established under the SEZ Act will also have
authority under the labour laws. According to Section 23 of the SEZ Act, the
state government has the authority to choose one or more courts to preside
over any civil cases that arise in the SEZ and to announce evidence obtained
there. No court other than the appointed court has the authority to hear any
case or evaluate any evidence.
The operation of special economic zones (SEZs) in India depends heavily on
labour. SEZs are intended to encourage economic growth by luring foreign
investment, creating jobs, and boosting exports. However, worries about labour
laws, worker rights, and social justice have also accompanied the expansion of
In order to ensure that SEZs continue to support economic development in the
nation, it is critical for policymakers, corporations, and civil society to
address these issues, promote fair labour practises in SEZs, ensure the
protection of workers' rights, and give workers access to channels for
representation and collective bargaining. Additionally, it's critical to foster
an atmosphere that fosters career advancement and upskilling while giving
employees a sense of stability in their positions.
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Employment, Poverty and Human Development. esocialsciences.com, Working
- Dr. Priyadarshini Sharma Dr. Rameshwar Jat, "SPECIAL ECONOMIC ZONES AND
EMPLOYMENT GENERATION" Inspira-Journal of Commerce, Economics & Computer
Science (Volume 07, No. 03, July-Sept., 2021, pp. 122-125)
- Douglas Zhihua Zeng, Global Experiences with Special Economic Zones
With a Focus on China and Africa
- Jaivir Singh, Labour Law and Special Economic Zones in India, WORKING
PAPER SERIES Centre for the Study of Law and Governance Jawaharlal Nehru
University, New Delhi April 2009
- Parwez, Sazzad. (2016). Labour and Labour Welfare in Special Economic
Zones in India with Special Reference to Gujarat. South Asian Survey. 23.
- Paul, Saine, Special Economic Zones and the Exploitation Underneath
(November 25, 2013). Available at SSRN: https://ssrn.com/abstract=2359449 or
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