SEZ Rules Amended by DPIIT

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Dated: 14.08.2025

SEZ Rules Amended by DPIIT

The Ministry of Commerce and Industry, Government of India, has introduced significant amendments to the Special Economic Zones Rules, 2006, through the Special Economic Zones (Amendment) Rules, 2025. These amendments, notified on June 3, 2025, aim to enhance the operational framework of Special Economic Zones (SEZs) and promote growth in key sectors such as semiconductors and electronic components. Below, we summarize the key changes introduced in the amendment.

1. Focus on Semiconductor and Electronics Manufacturing 

A major highlight of the amendment is the emphasis on promoting SEZs dedicated to semiconductor and electronic component manufacturing. The following changes have been introduced:

Land Area Requirement: SEZs exclusively set up for manufacturing semiconductors or electronic components must have a contiguous land area of ten hectares or more.
Definition of Electronic Components: The amendment provides clarity on what constitutes electronic components, including items such as display module sub-assemblies, camera module sub-assemblies, battery sub-assemblies, printed circuit boards, lithium-ion cells, mobile and IT hardware components, hearables, and wearables.

2. Relaxation of Encumbrance-Free Area Condition 

The amendment introduces flexibility in the requirement for encumbrance-free areas. The SEZ Board may now relax this condition in cases where the land is mortgaged or leased to the Central or State Government or their authorized agencies. This relaxation is subject to the Board recording the reasons in writing.

3. Changes in Export and Supply Rules 

The rules governing the export and supply of finished goods have been revised:

The word “shall” in Rule 18(6)(a) has been replaced with “may,” providing more flexibility.
Finished goods can now be:
- Exported out of the country.
- Transferred to Customs Bonded Warehouses or Free Trade and Warehousing Zones maintained by Overseas Entities.
- Supplied to the Domestic Tariff Area with applicable duties.

4. Net Foreign Exchange (NFE) Calculations for Semiconductor Units 

For SEZ units providing manufacturing services in the semiconductor sector, the amendment specifies that the value of goods received and supplied on a free-of-cost basis will be included in Net Foreign Exchange (NFE) calculations. The valuation will follow applicable customs valuation rules.

5. Reduction in Land Area Requirement for Certain SEZs 

The amendment reduces the minimum land area requirement for certain SEZs. For instance, the land area requirement mentioned in Annexure II, serial no. 3, has been reduced from 20 hectares to 4 hectares.

Conclusion

The Special Economic Zones (Amendment) Rules, 2025, reflect the Government of India’s commitment to fostering growth in high-priority sectors like semiconductors and electronics. By introducing flexibility in land use, export rules, and NFE calculations, these amendments aim to attract investments, boost exports, and create a conducive environment for manufacturing and innovation.

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Source: DPIIT

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