A special one-time arrangement has been introduced to empower manufacturing units operating in around 280 operational SEZs by allowing them to sell a specified portion of their production in the Domestic Tariff Area (DTA) at concessional customs duty rates. In addition, conditional reductions in customs duties have also been implemented.

A senior official from the Ministry of Commerce stated that out of 423 approved SEZs in the country, 368 have been notified so far. With semiconductor and electronic component manufacturing now being included within the SEZ framework, the scope of SEZ activity is expanding further. Recently, in the Union Budget, Finance Minister Nirmala Sitharaman announced targeted reforms for SEZs affected by global trade disruptions. Under these reforms, eligible SEZ manufacturing units have been permitted to sell a specified share of their production into the Domestic Tariff Area (DTA) at concessional duty rates instead of the standard customs duty structure.

To attract greater foreign investment into the country, the Government announced the Special Economic Zones (SEZ) Policy in April 2000. However, its implementation could not commence swiftly. Subsequently, to enhance investor confidence and demonstrate the Government’s commitment to a stable SEZ policy framework, the SEZ Act, 2005 and the SEZ Rules, 2006 were brought into force. Strengthening the policy framework further, amendments were introduced to the SEZ Rules, 2006 in June 2025 to facilitate the establishment of SEZs exclusively for semiconductor and electronic component manufacturing. In the same month, the Government notified two new SEZs for semiconductor and electronic component production—one at Sanand (Gujarat) and another at Dharwad (Karnataka).

Traditionally, sectors such as IT & ITES, pharmaceuticals and biotechnology, textiles and garments, gems and jewellery, automobile and engineering, petrochemicals and chemicals, food processing, renewable energy, and multi-product manufacturing have benefited from the SEZ framework. However, recent amendments to SEZ Rules now provide relaxations in minimum land requirements and regulatory compliance norms for semiconductor and electronic component manufacturing units. These reforms also enable DTA supply of semiconductor products and allow inclusion of the value of free-of-cost goods in Net Foreign Exchange (NFE) calculations.

Investment & Exports

According to official data from the Ministry of Commerce and Industry, total exports from operational SEZs exceeded ₹11.70 lakh crore as of December 2025, registering a growth of 32.02 percent over the previous financial year 2024–25. Employment in SEZs increased to 31.73 lakh, while total investment reached ₹7.78 lakh crore. This translates into an average generation of approximately 4.08 lakh jobs per ₹1 lakh crore of investment. Tamil Nadu has the highest number of SEZ units in the country at 58.

Reduction In Customs Duties Implemented

• Applicable to units that commenced production on or before 31 March 2025 
• Partial exemption available on Basic Customs Duty (BCD) and Agriculture Infrastructure & Development Cess (AIDC) 
• Concessions applicable beyond specified threshold limits 
• Relief valid from 1 April 2026 to 31 March 2027 
• Not applicable to FTWZ (Free Trade Warehousing Zone) units 
• Not applicable to imported goods cleared into the Domestic Tariff Area 
• Eligible units must comply with audit conditions under SEZ Rules

Key Incentives And Facilities 

• Full exemption from customs duties 
• Relief in GST and indirect taxes 
• Income tax benefits 
• Simplified export-import procedures 
• Facility for Domestic Tariff Area (DTA) sales 
• Ease of foreign investment 
• Additional incentives from State Governments 
• Infrastructure support 
• Single-window clearance at Central and State levels 

GIFT City Among Gujarat’s Key SEZ Hubs

According to a senior official from the Gujarat Industries Department, the number of approved SEZs in Gujarat had once reached 71. However, due to withdrawal by some developers, the number of operational SEZs has currently reduced to 27. From port-based hubs such as Mundra and Kandla to sector-focused ecosystems like GIFT City, each SEZ in Gujarat offers a distinct value proposition to both global and domestic investors. India’s largest multi-product SEZ is located at Mundra. Other major SEZ locations in Gujarat include Dahej, Hazira, Sachin, Chacharwadi-Vasana, Ahmedabad, Vadodara, Rampara, and Reliance SEZ zones.

Top 10 States By Operational SEZs

• Tamil Nadu – 58 
• Karnataka – 50 
• Maharashtra – 41 
• Andhra Pradesh – 30 
• Gujarat – 27 
• Uttar Pradesh – 23 
• Haryana – 22 
• Kerala – 20 
• West Bengal – 08 
• Rajasthan – 06