SEZ regulations

Published on 25 Oct 2025

• The Ministry of Commerce and Industry has recently amended rules for Special Economic Zones (SEZs) focused on semiconductor and electronic component manufacturing.

• In India, a Special Economic Zone (SEZ) is a duty-free area treated as a foreign territory for trade, offering tax incentives to boost exports and investment.

• SEZ is governed by the Special Economic Zones Act, 2005 and 2006 Rules.

            Amendments to SEZ Rules, 2006:

• Rule 5: For SEZs focused on semiconductors or electronic components, the minimum land requirement has been reduced from 50 hectares to 10 hectares - Makes it easier for smaller investors to enter the sector.

• Rule 18: SEZ units in these sectors can now sell within India (domestically) after paying applicable duties, not just export goods - Increases domestic availability of critical components and reduces import dependency.

• Rule 7: The Board of Approval can now allow SEZ land to be mortgaged or leased to government agencies, even if it's not fully free of legal claims (encumbrances) - Eases land acquisition hurdles and enables quicker setup of SEZs without legal bottlenecks.

• Rule 53: The amendment  will 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.

Keywords:

SEZ regulations Ministry of Commerce and Industry Ease of doing business Special Economic Zones Foreign Exchange Economy Semiconductor Electronics Industry Investment