Only six years after the occurrence of a category 5 cyclone in 1999, the Government of Orissa designated the coastal district of Jagatsinghpur to be the site for the largest FDI project in the history of India: a deal was signed with a South Korean company for the development of a major steel plant, mines, railway links and a captive port to exploit the state’s rich iron ore and coal deposits. The Memorandum of Understanding provided investors with a 100 percent tax exemption for five years—part of a recent initiative to further boost FDI inflows.

Without a clear risk-sharing framework in place, the Government of Orissa was potentially taking on unlimited liabilities for future disaster losses. In addition to the social and environmental costs associated with the relocation of existing communities, the clearing of forests and farmlands and the loss of livelihoods for landless and fishing communities, the project would increase hazard exposure and probably act as a magnet for further risk-increasing development in the area.

The controversial project has ignited protests from communities, the National Human Rights Commission and environmental agencies, forcing several reviews to be undertaken, most recently, in August 2012 by the Ministry of Environment and Forests. The review resulted in environmental clearance for the project to be temporarily suspended; but the project remains a priority for both state and federal governments.