How best to play finance special economic zones

What is needed is not mere deregulation but the construction of institutions that will permit private firms to compete in exporting and inspire confidence in global customers

The international dimension is central to Indian financial economic policy. With international financial services, there is a defensive part (of the local market losing ground) and there is an opportunity (of playing a bigger role in the world). We in India are hobbled by flaws in financial regulation, capital control, and taxation. The best path is to solve these problems for India. The second-best path is to set up finance special economic zones (SEZs). The Budget speech has achieved a big milestone in this journey.

There are two parts to the export of financial services. The defensive part worries about India’s