Urbanising the Villages: Three modes of village incorporation and the implications for structural transition in India’s “Chinese-style” special economic zones (SEZs)

• Large Indian special economic zones (SEZs) employ various modes of incorporating existing villages. • Village incorporation by SEZs can create “urban villages”, as in China, but does not typically lead to structural transition. • Village outcomes are partly shaped by mode of incorporation, which derives from pre-existing agrarian dynamics. • Indian SEZs have not produced widespread beneficial economic outcomes for locals. This article examines outcomes of three different modes of in-situ urbanisation in the context of large “Chinese-style” Special Economic Zone (SEZ) development in rural India, arguing that mode of village incorporation has an important impact on development outcomes for local populations. It compares three Indian cases with the early stages of the SEZ “model” in China’s Shenzhen, where urban villages emerged, a thriving rentier economy grew, and structural transition was combined with distinctive infrastructural and governance outcomes. Although much work has examined macro-level economic contributions of India’s SEZs, little attention has been paid to implications for local areas beyond initial protests over dispossession, and none has focused on impacts for those whose rural settlements are enveloped by the new industrial area. Whether India’s new urban villages experience similar structural transformation to their Chinese counterparts is therefore unknown. Based on in-depth qualitative fieldwork in three SEZs in south, north and west India (2018–2023), as well as earlier fieldwork in Shenzhen (2008), this study assesses shifts in livelihoods, institutions and urbanisation. It argues that the three different approaches to incorporating villages derive from the dynamics of local land politics, and contribute to varying forms and degrees of livelihoods transition, in which their interactions with local institutions of rural governance are highly relevant. The article thus contributes to a re-examination of the relationship between industrialisation and urbanisation in the developing world, highlighting how agrarian societies are shaped and reshaped by processes of urbanisation and industrialisation and vice versa. Overall, while the north Indian SEZ has produced better livelihoods outcomes than the south or west, in all three cases structural transitions are incomplete and inequitable, and none have produced the widespread economic benefits for locals seen in China.