Changes to Special Economic Zones for Semiconductors
The Government of India has recently updated regulations for Special Economic Zones (SEZs) focused on semiconductor and electronic component manufacturing. Announced on June 9, 2025, these changes aim to enhance investment and manufacturing in high-tech sectors. The Ministry of Commerce and Industry brought into light that these amendments are crucial for attracting pioneering investments and fortifying India’s position in the global semiconductor supply chain.
Key Regulatory Changes
The amendments to the SEZ Rules, 2006, include reductions in land requirements. The minimum plot size for semiconductor SEZs has been decreased from 50 hectares to 10 hectares. This change allows smaller firms to establish operations. Additionally, SEZ units can now sell products domestically after paying applicable duties, expanding their market reach beyond exports.
Relaxation of Land Norms
Another important amendment permits the Board of Approval for SEZs to relax the requirement for encumbrance-free land. This applies when land is mortgaged or leased to the central or state governments. This flexibility is expected to facilitate the establishment of new SEZs by reducing barriers related to land ownership.
Financial Implications
The revised rules also alter customs valuation norms. The value of goods supplied free of cost can now be included in Net Foreign Exchange (NFE) calculations. This change is intended to improve the financial viability of SEZs and encourage more investments in capital-intensive sectors.
Recent Approvals and Investments
Following these regulatory updates, the Board of Approval has granted permission for two SEZ projects. Micron Semiconductor Technology India is set to invest ₹13,000 crore in a facility located in Sanand, Gujarat. Hubballi Durable Goods Cluster Private Ltd, part of the Aequs Group, will invest ₹100 crore in an electronics components SEZ in Dharwad, Karnataka. These investments are expected to create a substantial number of skilled jobs.
Expected Outcomes
The government anticipates that these amendments will stimulate high-tech manufacturing. This initiative is expected to boost the semiconductor manufacturing ecosystem in India. The overall goal is to create highly skilled employment opportunities and enhance the country’s technological capabilities in the global market.
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