**Policy Summary: Amendments to SEZ Rules for Semiconductor and Electronic Component Manufacturing**
On July 22, 2025, the Ministry of Commerce and Industry addressed Lok Sabha Unstarred Question No. 277 regarding Special Economic Zone (SEZ) norms for semiconductor and electronic component manufacturing. The response clarifies amendments made to Rule 5 of the Special Economic Zone Rules, 2006, through notification G.S.R. 364E, dated June 3, 2025.
The key policy changes are as follows:
* **Reduced Minimum Land Requirement:** The minimum contiguous land area required for establishing SEZs exclusively for manufacturing semiconductors or electronic components has been reduced from 50 hectares to 10 hectares. This amendment aims to facilitate the establishment of manufacturing facilities in these sectors.
* **Domestic Supply Allowed:** Semiconductor units within SEZs are permitted to supply their products to the Domestic Tariff Area (DTA) within India. These supplies are subject to the applicable duties of customs, including anti-dumping, countervailing, and safeguard duties, as per Section 30 of the Special Economic Zone Act, 2005 and the Customs Tariff Act, 1975. The duties applied will be the same as if the goods were imported.
Key Entities Referenced
SHRI BAIJAYANT PANDA: Member of Parliament who asked the question about SEZ norms.
Minister of COMMERCE AND INDUSTRY: The government minister responsible for commerce and industry.
SHRI JITIN PRASADA: The Minister of State in the Ministry of Commerce and Industry who provided the answer.
Special Economic Zone Rules, 2006: The specific regulations governing Special Economic Zones in India.
Special Economic Zone Act, 2005: The primary legislation enabling the establishment and operation of Special Economic Zones in India.
Special Economic Zones: Designated areas within India with different economic regulations to promote investment and trade.
Domestic Tariff Area: The area of India outside of the Special Economic Zones, subject to normal customs duties.
Customs Tariff Act, 1975: The Indian law that governs the imposition of customs duties on imported goods.
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
(DEPARTMENT OF COMMERCE)
LOK SABHA
UNSTARRED QUESTION NO. 277
ANSWERED ON 22.07.2025
SEZ Norms
277. SHRI BAIJAYANT PANDA:
Will the Minister of COMMERCE AND INDUSTRY (वाणिज्य और उद्योग मंत्री) be
pleased to state:
(a) whether the Government has reduced the minimum plot size for Special
Economic Zone units that manufacture semi-conductors or electronic parts;
(b) if so, the reasons therefor;
(c) whether the Government allows such semi-conductor units to also supply to the
rest of India, apart from exporting; and
(d) if so, the details thereof along with the tax rate and suits applicable.
ANSWER
वाणिज्य और उद्योग मंत्रालय में राज्य मंत्री (श्री जिजिन प्रसाद)
THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY
(SHRI JITIN PRASADA)
(a) to (b): In order to facilitate establishment of manufacturing facilities in
semiconductors and electronics components, Rule 5 of the Special Economic Zone
Rules, 2006 has been amended vide notification G.S.R. 364(E) dated 3rd June, 2025
to reduce the requirement of minimum contiguous land area to 10 Hectares from 50
Hectares for setting up of Special Economic Zones (SEZs) exclusively for
manufacturing semiconductors or electronic components.
(c) to (d): As per Section 30 of the Special Economic Zone Act, 2005, SEZ Units,
including semiconductor units, are allowed to supply their products to the Domestic
Tariff Area in the country by paying the applicable duties of customs including anti-
dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975,
where applicable, as leviable on such goods when imported.
*****