Special economic zones, as the name suggests are areas of specific economic activities where the economic laws are more liberal than the laws governing the economy of the country. By declaring a geographical area as a special economic zone all businesses in that area are either exempted from paying tax(sales, excise, customs) or if there is a need to pay them, the rate at which they are charged tax is extremely low thus attracting investors. Note: the exemption from paying tax is only for a specific period which id pre determined.

A lot of countries in the world have adopted this method including China, India, Pakistan and Peru because it ensures Foreign Direct Investment thus leading to technological and infrastructural development of that area, resulting in better employment opportunities for the people and on the hole provides a boost to the economy of the nation.
However, a sensitive topic with respect to SEZ’ is the procurement of land for such projects because a lot of land is required for such projects, and land being a finite resource there are numerous disputes between the farmers and the governments regarding the land.