Recently, India’s Department of Commerce announced sweeping changes to Special Economic Zone (SEZ) rules to accelerate high-tech manufacturing, especially in semiconductors and electronics.
The minimum land required for a semiconductor SEZ has been reduced from 50 hectares to just 10 hectares, making it easier for new players to enter. Land can now be mortgaged or leased to government agencies without blocking SEZ approval, removing a major regulatory hurdle.
SEZ units can also sell to the domestic market after paying duties, and free-of-cost goods are now included in Net Foreign Exchange (NFE) calculations, simplifying compliance and aligning with global practices.
According to the department, these reforms are designed to attract global investment, expedite project approvals, and enhance India’s position in the global semiconductor value chain.
They lower entry barriers, improve operational flexibility, and make it easier for both large and small companies to set up advanced manufacturing facilities.
The policy shift is expected to create high-skill jobs, build a local supply chain, and reduce India’s reliance on imported chips.
A clear sign of the reforms’ immediate impact is the rapid approval of two major SEZ projects.
Micron Semiconductor Technology India Pvt Ltd (MSTI) has received approval to set up a 37.64-hectare semiconductor SEZ in Sanand, Gujarat, with an investment commitment of ₹13,000 crore.
This facility is set to become one of the largest nodes in India’s chip-making landscape, focusing on advanced manufacturing and creating significant employment opportunities.
Similarly, Hubballi Durable Goods Cluster Pvt Ltd, promoted by Aequs Group, has been approved for an 11.55-hectare electronics components SEZ in Dharwad, Karnataka, with a projected investment of ₹100 crore.
These changes lower entry barriers and speed up project approvals. Companies can launch new fabs and assembly plants faster.
The reforms are already attracting large investments, as seen with Micron and Aequs. SEZ units now have more flexibility to serve both export and domestic demand, improving business viability.
The policy shift is expected to create high-skill jobs and help build a local supply chain. It will also reduce India’s reliance on imported chips, supporting government goals for self-reliance.
With these reforms, India is positioning itself as a competitive destination for global semiconductor manufacturing and investment
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