Of considerable interest within policy and academic circles, is the emergence of India’s status as a new economic powerhouse in Asia. This development can be linked to its recent advocacy of ‘effective’ local economic development policies, particularly in attempting to create ‘new economic spaces’ as a model for economic development. In this regard, in 2005, the Indian central government passed the Special Economic Zone Act: to attract foreign and domestic investment, to boost export earnings, to generate local employment and to make improvements to infrastructural services. As a result, new challenges have emerged. At one end, there is a reduced role for central government intervention in economic development as a result of shifts from an earlier central government-directed policy mechanism to this contemporary approach in SEZ policy where state governments as well as private investors are increasingly seen as important partners in economic development. On the other hand, not only have the number of sanctioned SEZs exceeded the expectations of policy makers, but also that there is now an uneven distribution of SEZ investments across the country that only a stronger central government intervention can possibly address.