Govt notifies SEZ reforms to boost semiconductor, electronics component manufacturing

Central government has announced a series of policy relaxations for special economic zones (SEZs) aimed at boosting high-tech manufacturing, particularly in semiconductors and electronic components. 

These changes are designed to attract pioneering investments, ease regulatory hurdles, and strengthen India’s position in the global semiconductor value chain. A key reform involves amending Rule 5 of the SEZ Rules, 2006, which reduces the minimum contiguous land requirement for SEZs dedicated to semiconductor or electronics component manufacturing from 50 hectares to just 10 hectares. In



addition, Rule 7 has been amended to allow the Board of Approval to relax encumbrance-free land norms when land is mortgaged or leased to the central or state governments, or their authorised agencies. 

The government has also modified Rule 53 to permit the value of goods received and supplied free of cost to be included in Net Foreign Exchange (NFE) calculations, under customs valuation norms. Another important change under Rule 18 now allows SEZ units in these sectors to sell goods in the domestic tariff area after paying applicable duties.