Centre notifies SEZ reforms to boost semiconductor, electronics manufacturing

New Delhi: The central government has announced a series of policy relaxations for special economic zones (SEZs) aimed at boosting high-tech manufacturing, particularly in semiconductors and electronic components, within these zones, the Ministry of Commerce & Industry said in a statement on Monday.

These changes are designed to attract pioneering investments, ease regulatory hurdles, and strengthen India’s position in the global semiconductor value chain, the ministry said.

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A key reform involves amending Rule 5 of the SEZ Rules, 2006, which reduces the minimum contiguous land requirement for SEZs dedicated to semiconductor or electronics component manufacturing from 50 hectares to just 10 hectares.

In addition, Rule 7 has been amended to allow the Board of Approval to relax encumbrance-free land norms when land is mortgaged or leased to the central or state governments, or their authorised agencies.

The government has also modified Rule 53 to permit the value of goods received and supplied free of cost to be included in Net Foreign Exchange (NFE) calculations, under customs valuation norms.

Another important change under Rule 18 now allows SEZ units in these sectors to sell goods in the domestic tariff area after paying applicable duties.

These amendments, notified by the Department of Commerce on 3 June, 2025, are expected to spur investment in capital-intensive, import-dependent industries with long gestation periods—such as semiconductors—while also generating highly skilled employment.

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“The amendments will boost high-tech manufacturing in the country, spur the growth of the semiconductor ecosystem, and create highly skilled jobs,” said the commerce ministry statement.

Following these reforms, the Board of Approval for SEZs has cleared two proposals: Micron Semiconductor Technology India Pvt Ltd (MSTI) and Hubballi Durable Goods Cluster Pvt Ltd (Aequs Group).

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Micron will establish a semiconductor manufacturing SEZ in Sanand, Gujarat, covering 37.64 hectares with an estimated investment of ₹13,000 crore. Aequs will set up an electronics components SEZ in Dharwad, Karnataka, spanning 11.55 hectares with an investment of approximately ₹100 crore.