The government has enacted reforms to the Special Economic Zones (SEZ) rules to stimulate semiconductor and electronics component manufacturing. Key changes include reducing the minimum land requirement for semiconductor and electronics SEZs from 50 to 10 hectares and easing encumbrance norms, allowing land mortgaged or leased to the Central or State Government (or their agencies) to be used. Amendments to Rule 53 now permit the inclusion of free-of-cost goods in Net Foreign Exchange (NFE) calculations, assessed using customs valuation rules. Rule 18 has also been amended to allow SEZ units in these sectors to supply domestically after paying applicable duties. These changes aim to boost high-tech manufacturing, foster a semiconductor ecosystem, and generate skilled jobs. The Department of Commerce notified these amendments on June 3, 2025. Following these changes, the Board of Approval for SEZs approved proposals from Micron Semiconductor Technology India Pvt Ltd and Hubballi Durable Goods Cluster Private Ltd (Aequs Group) to establish SEZs in Gujarat and Karnataka, respectively, for semiconductor and electronic component manufacturing.
Key Entities Referenced
37.64 Ha: Area of Micron's SEZ facility in Sanand, Gujarat.
Ministry of Commerce Industry Govt: Government ministry responsible for commerce and industry.
SEZ Reforms: Reforms related to Special Economic Zones.
Semiconductor: Refers to Semiconductor manufacturing sector.
Electronics Component: Refers to Electronics Component manufacturing sector.
Minimum Land Requirement: The minimum land area required for Semiconductor and Electronics SEZs
10 Hectares: Reduced minimum land requirement for Semiconductor and Electronics SEZs.
Encumbrance Norms: Norms related to encumbrances on SEZ land.
09 JUN 2025: Date of posting of the notification.
PIB Delhi: Press Information Bureau, Delhi office.
Special Economic Zones: Specific areas within a country that have different economic regulations than other areas in the same country.
SEZ rules: Rules and regulations governing Special Economic Zones.
Rule 5 of SEZ Rules, 2006: Specific rule within the SEZ Rules, 2006, related to land area requirements.
50 hectares: The original minimum land requirement for SEZs set up for manufacturing semiconductors or electronic components.
Rule 7 of SEZ Rules, 2006: Specific rule within the SEZ Rules, 2006, related to encumbrance-free land.
Board of Approval for SEZs: The board responsible for approving SEZs.
Central or State Government: Government entities that may have a mortgage or lease on SEZ land.
Rule 53: Amended rule that allows the value of goods received and supplied on a freeofcost basis to be included in Net Foreign Exchange NFE calculations
Net Foreign Exchange: The overall balance of foreign exchange inflows and outflows related to SEZ operations.
NFE: Abbreviation for Net Foreign Exchange.
Rule 18 of the SEZ Rules: Specific rule that allows SEZ units in semiconductor as well as electronics component manufacturing sector to also supply domestically into the Domestic Tariff area.
Domestic Tariff area: Area within the country that is not a Special Economic Zone.
Department of Commerce: Government department that notified the amendments.
3rd June, 2025: Date the amendments were notified.
Micron Semiconductor Technology India Pvt Ltd: Company that received approval for setting up an SEZ.
MSTI: Abbreviation for Micron Semiconductor Technology India Pvt Ltd.
Hubballi Durable Goods Cluster Private Ltd: Company that received approval for setting up an SEZ.
Aequs Group: Also known as Hubballi Durable Goods Cluster Private Ltd.
Sanand, Gujarat: Location where Micron will establish its SEZ facility.
Rs. 13,000 crores: Estimated investment for Micron's SEZ facility.
Dharwad, Karnataka: Location where Aequs will establish its SEZ.
11.55 Ha: Area of Aequs' SEZ in Dharwad, Karnataka.
Rs. 100 crores: Estimated investment for Aequs' SEZ.
Abhijith Narayanan: Name of the person associated with the release.
Release ID: 2135116: Unique identifier for the press release.
Ministry of Commerce & Industry
Govt Notifies SEZ Reforms to Boost Semiconductor
and Electronics Component Manufacturing
Minimum Land Requirement for Semiconductor and
Electronics SEZs Reduced to 10 Hectares;
Encumbrance Norms Eased
Posted On: 09 JUN 2025 4:10PM by PIB Delhi
The government has introduced pioneering reforms in the Special Economic Zones (SEZ) rules to address the
specialized needs of semiconductor and electronics component manufacturing sectors. Since manufacturing in
these sectors is highly capital intensive, import dependent and involve longer gestation periods before turning
profitable, rule amendments have been carried out to promote pioneering investments and boost manufacturing in
these high technology sectors.
After amendments in Rule 5 of SEZ Rules, 2006, an SEZ set up exclusively for the manufacturing of
semiconductors or electronic components will require a minimum contiguous land area of only 10 hectares,
reduced from the earlier requirement of 50 hectares. Further, amendment to Rule 7 of SEZ Rules, 2006, allows the
Board of Approval for SEZs to relax the condition requiring SEZ land to be encumbrance-free in cases where it is
mortgaged or leased to the Central or State Government or their authorized agencies.
The amended Rule 53 will allow the value of goods received and supplied on a free-of-cost basis to be included in
Net Foreign Exchange (NFE) calculations and assessed using applicable customs valuation rules. Moreover,
amendments have been made in Rule 18 of the SEZ Rules to allow SEZ units in semiconductor as well as
electronics component manufacturing sector to also supply domestically into the Domestic Tariff area as well after
payment of applicable duties.
The amendments will boost high-tech manufacturing in the country, spur growth of semiconductor manufacturing
ecosystem and create high skilled jobs in the country.
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These amendments have been notified by the Department of Commerce on 3 June, 2025. Subsequently, the
Board of Approval for SEZs has accorded approval to the proposals received from Micron Semiconductor
Technology India Pvt Ltd (MSTI) and Hubballi Durable Goods Cluster Private Ltd (Aequs Group) for setting up of
SEZs for manufacturing of semiconductors and electronic components respectively.
Micron will establish its SEZ facility in Sanand, Gujarat over an area of 37.64 Ha with an estimated investment of
Rs. 13,000 crores, while Aequs will establish its SEZ in Dharwad, Karnataka over an area of 11.55 Ha to
manufacture electronics components with an estimated investment of Rs. 100 crores.
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Abhijith Narayanan
(Release ID: 2135116)