Govt Eases SEZ Rules to Boost Semiconductor and Electronics Sector

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  • Last Updated on 5 June, 2025

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Semiconductor SEZ Rules 2025

Notification G.S.R. 364(E); dated: 03.06.2025

The Special Economic Zones (SEZ) Rules, 2006, have been amended to facilitate growth in semiconductor and electronics manufacturing in India. The changes are part of the government’s broader effort to attract high-tech investments and support the ‘Make in India’ initiative.

1. Reduced Land Requirement for Semiconductor SEZs

Under the amended rules, SEZs focused on semiconductor manufacturing can now be established on a minimum of 10 hectares of land. This is a significant relaxation from earlier norms and is aimed at encouraging the establishment of more fab units and related infrastructure in India.

2. Flexibility in Land Ownership Norms

The government has also relaxed the encumbrance-free land requirement. Now, land leased or mortgaged to the government will be considered acceptable for SEZ development. This move is expected to resolve practical challenges in acquiring large tracts of clear-title land, particularly in urban and semi-urban areas.

3. Eased Export Norms and Movement of Goods

To enhance operational flexibility, the amended rules permit the movement of goods from SEZs to bonded warehouses and Free Trade and Warehousing Zones (FTWZs). This will streamline supply chain logistics and reduce delays in exports, especially for components and sub-assemblies.

4. Inclusion of Free-of-Cost Goods in NFE Calculation

In a move to ensure greater transparency and accuracy, free-of-cost goods received by SEZ units must now be included in the Net Foreign Exchange (NFE) earnings calculation. This adjustment ensures a more holistic assessment of SEZ performance and compliance.

5. Minimum Land Area Relaxed for Certain SEZs

The amendments also reduce the minimum land area requirement for certain categories of SEZs from 20 hectares to just 4 hectares. This is expected to benefit smaller technology-focused SEZs and service-oriented zones, enabling greater participation from startups and mid-sized firms.

6. Conclusion

These strategic amendments are expected to accelerate India’s ambitions to become a global hub for semiconductor and electronics manufacturing. By easing regulatory barriers and enhancing flexibility, the SEZ framework is now more aligned with the fast-evolving needs of the technology sector.

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied