Govt Eases SEZ Norms for Semiconductor, Electronics Manufacturing

• SEZ land size cut to 10 hectares for semiconductors.
• ₹13,100 crore approved for SEZs in Gujarat, Karnataka.
• Amendments aim to boost high-tech, capital-intensive manufacturing.

The government announced a number of amendments to the rules governing the creation of special economic zones (SEZs) for the production of semiconductors or electronic components. The minimum plot size for these units will be lowered, and in addition to exporting, these SEZ semiconductor plants will be permitted to supply the rest of India.

The Ministry of Commerce and Industry stated that sanction has been given for the establishment of two SEZ facilities in Gujarat and Karnataka with a combined investment of ₹13,100 crore subsequent to the announcement of these modifications.

“Since manufacturing in these sectors is highly capital intensive, import dependent and involves longer gestation periods before turning profitable, rule amendments have been carried out to promote pioneering investments and boost manufacturing in these high technology sectors,” the Ministry of Commerce and Industry said in a release.

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A SEZ established only for the production of semiconductors or electronic components will now require a minimum contiguous land area of 10 hectares, instead of the previous 50 hectares, due to a change to Rule 5 of the SEZ Rules, 2006.

Following the payment of relevant duties, the amendment to Rule 18 of the SEZ Rules permits SEZ businesses in the semiconductor and electronics component manufacturing sectors to also supply domestically to the rest of India. SEZs have always been focused on exports.

Additionally, the Board of Approval for SEZs can modify the requirement that SEZ land be encumbrance-free in circumstances where it is mortgaged or leased to the Central or State Government or their authorized agencies thanks to a change to Rule 7 of the SEZ Rules, 2006.

The Department of Commerce announced these changes on June 3, 2025. The requests from Hubballi Durable Goods Cluster Private Ltd (a division of the Aequs Group) and Micron Semiconductor Technology India to establish SEZs for the production of semiconductors and electronic components, respectively, were then accepted by the Board of Approval for SEZs.