Govt Notifies SEZ Reforms to Boost Semiconductor and Electronics Component Manufacturing
The government has made amendments to the Special Economic Zones (SEZ) rules to address the specialized needs of semiconductor and electronics component manufacturing sectors. Amendments have been made in Rules 5, 7, 53 and 18 of SEZ Rules, 2006 with an aim to boost high-tech manufacturing, spur the growth of semiconductor manufacturing, and create high-skilled jos in the country.
Rule 5 of SEZ Rules, 2006, which mandated a minimum contiguous land area of 50 hectares has been amended to 10 hectares for the industries. Another amendment to Rule 7 allows for the Board of Approval for SEZs to relax the condition requiring SEZ land to be encumbrance-free in cases where it is mortgaged or leased to the Central or State Government or their authorized agencies. Rule 53 has been amended to allow the value of goods received and supplied on a free-of-cost basis to be included in Net Foreign Exchange (NFE) calculations and assessed using applicable customs valuation rules. Amendments to Rule 18 allow SEZ units in semiconductor as well as electronics component manufacturing sector to also supply domestically into the Domestic Tariff area as well after payment of applicable duties.
The amendments were notified by the Department of Commerce on 3rd June, 2025.
