The spatial expansion of cities has resulted in contested occupancies in peri-urban areas. It is neither considered rural nor urban and is subject to urbanization. It is also physically separated from agricultural land or natural open space by the city, and there is no continuity with the city’s built-up area. Special economic zones are designated geographic areas within a country that are demarcated to encourage industry, manufacturing, and export-oriented services. They are typically characterized by liberal tax laws and economic policies. Though special economic zones are considered instruments for a country’s development, the employment opportunities they generate contribute to an increase in the country’s gross domestic product. On the other hand, SEZs also have negative impacts such as forcible land acquisition, which affects the livelihood of farmers and agricultural laborers. They can also disrupt the normal standards of rural life and erode social capital. Inadequate planning and governance by local governments are resulting in various problems, highlighting the need for broad policy for planned spatial growth of megacities without disrupting the agriculture land. Forcible land acquisition should be avoided with proper resettlement and rehabilitation by the Indian national governance to ensure the sustainable development of the peri-urban areas. This article highlights the missing links of rural life and its impact on special economic zone in peri-urban area.