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Emergence of a new operational paradigm in the form of Special Economic Zone (SEZ) and acquisition of industrial land therefore is one of the most controversial issues in India and a debatable issue in some parts in Asia in recent times. There is no doubt that it will lead to rapid industrial and economic growth. But the process of development is under question as local agitations against acquisition of land for the purpose have turned violent. Understanding the condition is important for the host country as well as the nations of Europe and the USA sourcing considerable amount of FDI flow. In this paper, we propose a model for industrial land acquisition which provides for rehabilitation of those displaced outside the perimeter of the SEZ, so that the appreciation of land price accrues to them and the land owner becomes a part of the prosperity that the project generates.