Govt Overhauls SEZ Norms To Attract Semiconductor & High-Tech Investments

(MENAFN- KNN India) New Delhi, Jun 5 (KNN) The central government has implemented significant amendments to Special Economic Zone (SEZ) regulations, substantially reducing land requirements and expanding operational flexibility for zone operators.

The changes, formalised through the SEZ (Amendment) Rules, 2025 and notified on June 3, are specifically designed to encourage fresh investments in advanced manufacturing sectors, particularly semiconductors, electronic components, and telecommunications equipment.

The revised regulations introduce dramatic reductions in minimum land requirements across multiple categories of SEZs.

For semiconductor or display fabrication facilities, the mandatory land area has decreased from 50 hectares to 10 hectares, representing an 80 percent reduction in the entry requirement.

Multi-product SEZs located in hilly and northeastern regions, including Goa, Uttarakhand, Himachal Pradesh, and all eight northeastern states, now require only four hectares compared to the previous 20-hectare mandate.

Manufacturing units within SEZs will benefit from enhanced operational flexibility under the new framework.

These facilities can now directly export their products, sell in the domestic market upon payment of applicable duties, or transfer goods to bonded warehouses and Free Trade and Warehousing Zones.

This expanded range of options provides manufacturers with greater agility in managing their inventory and distribution strategies.

Service providers operating within SEZs have gained additional procurement flexibility, with permission to source raw materials, components, and capital goods from domestic suppliers.

This capability was previously restricted, limiting the operational efficiency of service-oriented SEZ units.

However, the amendment stipulates that all goods received without charge will be included in net foreign exchange earnings calculations, maintaining the regulatory oversight that SEZ units must demonstrate.

The government has authorised the use of mortgaged or leased land held by central or state government agencies for SEZ establishment, removing a substantial regulatory barrier that previously complicated project development and approval processes.

The implementation of these amended SEZ regulations is anticipated to provide additional momentum to semiconductor sector development.

(KNN Bureau)

MENAFN05062025000155011030ID1109642275