Indiabulls Real Estate said on Wednesday that Indiabulls Industrial Infrastructure, a wholly-owned subsidiary of the company focused on development of large scale infrastructure projects, received a formal approval from department of commerce (SEZ Section), government of India, for development of a multi-product special economic zone (SEZ) in the Nashik district in Maharashtra.

An amendment in the land acquisition rules for controversial special economic zones may pitch corporate India in a direct battle against farmers and locals. India’s government, facing imminent election defeat in several important states and violent protests against forced acquisition of farmland, announced in February that states could no longer acquire land.

Instead, new regulations will allow developers to buy land directly from farmers for special economic zones – regions with liberal economic laws designed to encourage investment, especially by foreign companies.

State governments had previously bought land under the Land Acquisition Act of 1894 – dating from the colonial era. The law gave governments absolute authority to unilaterally target, price and acquire any agricultural land for industrial projects.

Following China’s example, India plans to create more than 500 SEZs across the country. Commerce minister Kamal Nath has championed SEZs as “engines of growth" which will help boost exports, spur inward foreign investment and create thousands of jobs. Not everyone agrees.

Human rights groups are outraged by the large-scale displacements and loss of livelihoods that the SEZs will cause. They also criticise the government for giving generous fiscal incentives to industry while cutting subsidies on food. Human rights activist Medha Patkar says: “The government is distributing land to private companies, which is against the farmers and workers of the country."

Himanshu Thakkar, the founder of South Asia Network on Dams, River and People, says: “The conversion of land to SEZ would mean destruction of groundwater recharge systems, contamination by release of industrial effluent and crisis of water for the neighbouring communities."

More than 86,000 hectares of land will be required for the 237 SEZs approved so far. Most of this will have to be bought from farmers, displacing an estimated one million people.