Centre amends SEZ rules to attract investments in semiconductors, electronics manufacturing

These amendments were notified by the Department of Commerce on June 3, 2025

The Centre has amended the Special Economic Zones (SEZ) rules to address the specialised needs of the semiconductor and electronics components manufacturing sectors, the Ministry of Commerce and Industry said on Monday.

As per the ministry, amendments in the rules have been carried out to promote “pioneering investments and boost manufacturing” in these high-technology sectors.

Notably, manufacturing in these sectors is highly capital intensive as well as import-dependent and involves longer gestation periods before turning profitable.

The reforms include a reduction in the minimum contiguous land area requirement for the SEZs dedicated to semiconductor and electronics component manufacturing from 50 hectares to 10 hectares.

Besides, the board of approval for SEZs can now relax the condition requiring SEZ land to be encumbrance-free in cases where it is mortgaged or leased to the central or state government or their authorised agencies.

Furthermore, the amendments allow the value of goods received and supplied on a free-of-cost basis to be included in Net Foreign Exchange (NFE) calculations.

The SEZ units in these sectors are allowed to supply domestically into the Domestic Tariff Area (DTA) after payment of applicable duties.

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

These amendments, the ministry said, were notified by the Department of Commerce on June 3, 2025.

Subsequently, proposals by Micron Semiconductor Technology India (MSTI) and Hubballi Durable Goods Cluster (Aequs Group) got a green signal from the Board of Approval for SEZs.

These proposals are for setting up SEZs for the manufacturing of semiconductors and electronic components, respectively.

Accordingly, Micron will establish its SEZ facility in Sanand, Gujarat, over an area of 37.64 hectares with an estimated investment of ₹13,000 crore, while Aequs will establish its SEZ in Dharwad, Karnataka, over an area of 11.55 hectares to manufacture electronics components with an estimated investment of ₹100 crore.

Published on June 10, 2025