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Key Points

The Indian government has dramatically simplified Special Economic Zone regulations to attract semiconductor and electronics manufacturers. By reducing land requirement and offering more market flexibility, the policy aims to boost domestic high-tech manufacturing. These changes come amid growing global demand for electronic components and India's strategic push to become a manufacturing hub. The new rules specifically target emerging technology sectors like mobile hardware, battery cells, and semiconductor production.

Key Points: India Cuts SEZ Land Rules to Boost Semiconductor Manufacturing

  • Government reduces SEZ land requirement from 50 to 10 hectares
  • Allows domestic sales alongside exports
  • Targets semiconductor and electronics sectors
2 min read

Centre eases SEZ norms in big push to semiconductors, electronic parts

Government eases Special Economic Zone norms to attract semiconductor and electronics manufacturers with lower entry barriers and flexible market access.

"These changes will significantly lower the cost of entry for electronics manufacturers - Ministry of Commerce and Industry"

New Delhi, June 5

The government has eased rules to boost manufacturing of semiconductors and electronic components by allowing companies to set up factories on smaller plots in special economic zones (SEZs) which will lower the cost of entry. These units will also be allowed to sell their products in the domestic market, in addition to exports.

According to a gazette notification issued by the Ministry of Commerce and Industry, the minimum land requirement for factories in SEZs exclusively meant for making semiconductors or electronic components has been reduced to 10 hectares from 50 hectares required earlier.

Similarly, in multi-product SEZs, the minimum land requirement has been lowered to four hectares from 20 hectares earlier. This rule will be applicable in Goa, Uttarakhand, Himachal Pradesh, Nagaland, Manipur, Mizoram, Arunachal Pradesh, Tripura, Meghalaya, Sikkim, Ladakh, Puducherry, Andaman and Nicobar, Lakshadweep, Daman and Diu, and Dadra and Nagar Haveli.

The relaxed norms will apply to sectors including semiconductors, display module sub-assemblies, various other module sub-assemblies, printed circuit boards, lithium-ion battery cells, mobile and IT hardware components, hearables, and wearables. These changes, under the Special Economic Zones (Amendment) Rules, 2025, came into effect on June 3.

The move forms part of the government's strategy to boost the production of semiconductors and electronic products in the country amid global trade uncertainties that can potentially disrupt supply chains. India's demand for chips has surged in recent years with the robust rise in the manufacturing of smartphones and electric vehicles in the country.

The Special Economic Zones (Amendment) Rules, 2025, notified by the government on June 3, also give greater autonomy to manufacturers to move or sell finished goods.

Under the relaxed rules, companies can now either export the goods directly from India or sell them in the country (domestic tariff area) by paying the required taxes. They can also move their goods to a free trade and warehousing zone in the same or a different SEZ or to a customs bonded warehouse, which is a special storage under government control. This gives more flexibility to the companies to manage their inventories and increase profitability.

Besides, service providers based in SEZs can now source raw materials, capital goods, components and consumables from the domestic market, other than imports. This will make things easier as SEZ units are required to bring in more foreign exchange through exports than they spend on imports.

- IANS

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Reader Comments

Here are 6 diverse Indian perspective comments for the article:
R
Rahul K.
This is a game-changing move! Reducing land requirements will help smaller players enter semiconductor manufacturing. India needs to become self-reliant in chips - our EV and smartphone industries depend on it. Hope to see more such reforms. 🇮🇳
P
Priya M.
Good initiative but implementation is key. We've seen many policies fail due to red tape. Hope state governments cooperate fully. Also, what about water/electricity infrastructure in these SEZs? Manufacturing needs reliable utilities.
A
Arjun S.
Finally! This will attract more investment in Northeast states too. Arunachal and Manipur need industrial development. But government should ensure local employment generation - not just bring workers from other states.
S
Sunita R.
As someone working in electronics manufacturing, this is a welcome change. The previous 50-hectare rule was impractical. Now MSMEs can participate in semiconductor production. Make in India getting real teeth! 👏
V
Vikram J.
Concerned about environmental impact. Semiconductor manufacturing uses hazardous chemicals. Hope proper safeguards are in place, especially in ecologically sensitive areas like Goa and Himalayan states mentioned.
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Neha P.
Domestic market access is the real winner here. Earlier SEZ units couldn't sell locally without heavy duties. Now they can balance exports and local sales. Smart move to reduce dependence on Chinese imports! #AatmanirbharBharat

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