TECH ZONE: Singapore company Ascendas is developing this International Tech Park in Pune, and another one in Nagpur. -- PHOTO: ASCENDAS

'There was a little bit of concern about the environment here for the Singapore-India Economic Zone,' Minister of State for Trade and Industry S. Iswaran told The Straits Times last week.

'That has settled down and we are proceeding with confidence.'

Mr Iswaran, on a four-day swing through Chennai, Puducherry and Mumbai, was referring to the political controversy in India earlier this year over the government's plans to set up SEZs across the country.

In March, 14 people died when police fired at Nandigram, 120km south of Kolkata, as protests against land acquisition for an SEZ promoted by Indonesia's Salim Group turned violent.

After that incident, Prime Minister Manmohan Singh's government briefly paused on announcing new SEZs.

It later said there would be no forced acquisition of land and the zones would be capped at a maximum area of 5,000ha each. States have powers to lower the ceiling further.

Ascendas, which runs the Bangalore tech park, is the lead agency for the special zones.

The company is believed to have shortlisted a site outside Tamil Nadu state capital Chennai and another near Puducherry, further south along the coast facing South-east Asia.

While the site near Chennai is more than 500ha, the Puducherry site is more than double that area, people familiar with the matter have told The Straits Times previously.

Both Tamil Nadu and Puducherry are run by political parties that favour the zones.

'Any project of this nature will take five to seven years at the minimum,' Mr Iswaran said.

'Obviously this has to be a value proposition that is robust across election cycles.'

Singapore ministers have in the past spoken of plans to set up as many as three SEZs in the country.

At a press conference in Chennai last week, Ms Chong Siak Ching, president and chief executive officer of Ascendas, said it was also developing three more SEZs in India - a 10.5ha project within its flagship International Tech Park Bangalore, and one each in Pune and Nagpur.

'We are also looking to expand in other parts of the country,' she was quoted by The Hindu newspaper as saying.

Mr Iswaran declined to speculate whether there would be more zones.

'They are looking at a few options,' he said. 'The first criterion is that they have to be commercially viable.'

If Ascendas does set up the zones, it could be poised to take advantage of the surge in manufacturing that India has begun to see and its related demand for high-quality infrastructure.

Despite the central bank raising interest rates five times since mid-2006, manufacturing activity grew at its fastest pace in 11 months in September.

'It seems that manufacturing is beginning to jell,' said Mr Iswaran, whose visit included the inking of several joint ventures between companies ranging from biotechnology to real estate.

velloor@sph.com.sg