New SEZ Rules: Boosting India's High-Tech Ambitions

The government has amended SEZ Rules to catalyse investments in semiconductor and electronics component manufacturing, addressing their capital-intensive nature and long gestation periods. Under the revised Rule 5 of the SEZ Rules, 2006, an SEZ dedicated to semiconductors or electronic components now requires only 10 hectares of contiguous land, which has been lowered from 50 hectares previously.

Amended Rule 7 empowers the Board of Approval to relax the condition for the encumbrance-free land requirement when the land is mortgaged or leased to Central/State governments or their agencies.

Changes to Rule 53 permit the inclusion of free-of-cost goods received and supplied in Net Foreign Exchange (NFE) calculations, applying standard customs valuation. Further, Updated Rule 18 allows SEZ units in these sectors to sell domestically into the Domestic Tariff Area upon payment of duties, enhancing market flexibility.

Notified on 03 June, 2025, by the Department of Commerce, these reforms aim to bolster India’s high-tech manufacturing ecosystem and generate skilled employment. Following the notification, the Board of Approval cleared proposals from Micron Semiconductor Technology India (MSTI) and Hubballi Durable Goods Cluster (Aequs Group).

Micron will set up a 37.64-hectare SEZ in Sanand, Gujarat, with an estimated Rs 13,000-crore investment, while Aequs will establish an 11.55-hectare SEZ in Dharwad, Karnataka, with an estimated Rs 100-crore investment.

News by Rahul Yelligetti.