Special Economic Zones (SEZs) have proliferated over the past decade and are leveraged as engines for development, especially in emerging countries, notably China and India. While much debate has focused on their evolution and economic performance, laws sustaining and contesting SEZs have received less attention in academic literature. There is no internationally accepted legal framework to regulate SEZs, and governments have formulated their own SEZ policies with their respective national developmental objectives. SEZ policies often involve shifts in regulatory powers in the legislature and significant room for executive discretion, thus raising questions about their legal regime at both the domestic policy level and international economic law. In Section 2, the article starts with the SEZ policy experiences in China and India and their economic performances. Section 3 compares the differences between SEZ policies in the two countries. In Section 4, the authors argue that despite the differences in design, institutional characteristics, and economic outcomes of SEZs in China and India, there are common concerns rooted in the legal regimes that underpin the potential conflicts with national policy and international obligations. In Section 5, it is concluded and recommended that policymakers should properly consider the legal regimes governing SEZs and recognize their potential conflicting regimes.