India Notifies SEZ Reforms to Boost Semiconductor, Electronics Growth
In a major step to strengthen India’s semiconductor and electronics manufacturing ecosystem, the government has introduced key reforms in the Special Economic Zones (SEZ) Rules. These changes are designed to attract pioneering investments in high-tech sectors that are capital-intensive and require longer timelines to become profitable.
The latest amendments reduce the minimum land requirement for setting up SEZs exclusively for semiconductor and electronics component manufacturing from 50 hectares to just 10 hectares. This change is expected to make it easier for companies to establish such facilities and accelerate the development of India’s electronics ecosystem.
Additionally, the government has eased encumbrance norms under Rule 7 of the SEZ Rules, allowing land that is mortgaged or leased to central or state agencies to be used for SEZ development, provided it receives approval from the SEZ Board of Approval.
The reforms also include an amendment to Rule 53, which allows goods received or supplied on a free-of-cost basis to be counted towards Net Foreign Exchange (NFE) earnings using customs valuation rules. Rule 18 has also been amended to allow SEZ units in semiconductor and electronics manufacturing to sell their products in the Domestic Tariff Area after paying applicable duties.
These changes were notified by the Department of Commerce on June 3, 2025. Following the reforms, SEZ proposals by Micron in Gujarat and Aequs in Karnataka have been approved, with investments of ₹13,000 crore and ₹100 crore respectively.
Source: PIB
