"The legislation would give a big boost to FDI in the country and would generate more employment through increased economic activity," he said while addressing Parliamentary Consultative Committee meeting attached to his ministry.
Nath said since SEZs require world class infrastructure and the additional costs could be very high, infusion of investment on a massive scale including FDI was required to make the scheme a success.
"Substantial increase in foreign investment involving funding over a period of 15-25 years would be required, especially in infrastructure," he said.
Nath said Foreign Trade policy for 2005-06 would be announced by the end of March and indicated that it would focus on areas of potential quantum growth.
The Minister said SEZs would be instrumental in increasing manufactured exports and the revival of the manufacturing sector.
Members of Parliament Suresh Prabhu and A R Antulay suggested SEZs for coastal areas and setting up of single product zones.
K Karunakaran wanted adequate safeguards in the legislation to protect domestic industries, especially in agriculture and allied sectors.