India sharpens focus on exports-advanced manufacturing
Exports from the operational Special Economic Zones (SEZs) totalled over Rs.11.7 lakh crores in 2025-26 (till December, 2025), a 32.02% increase from the corresponding period in 2024-25, according to a government release on 28 Mar.
Total investment in the SEZs was Rs.7.86 lakh crores (as of December 2025), said the report. There are 368 notified SEZs in India, as of 28 Feb 2026.
The Union Budget 2026-27 proposed a special one-time measure to facilitate sale in domestic tariff area at concessional rate of duty by eligible manufacturing units of Special Economic Zones (SEZs). The quantity of such sales will be limited to a prescribed proportion of their exports.
As India sharpens its focus on exports, advanced manufacturing, and financial leadership, the SEZ framework stands out as a strategic pillar – poised to drive the next wave of investment and reinforce the country’s global economic stature, the report reviews the success of SEZs.
The SEZ policy, announced in April 2000, aims to transform these zones into engines of economic growth by providing world-class infrastructure, an attractive fiscal framework at both Central and State levels, and a simplified regulatory environment. SEZs operated under the provisions of the Foreign Trade Policy from November 2000 to February 2006, with fiscal incentives implemented through relevant statutory provisions. To build investor confidence and demonstrate the Government’s commitment to a stable SEZ policy framework, The SEZ Act, 2005 and SEZ Rules, 2006 were brought into force.
The performance and impact of SEZs are regularly monitored under the framework of the SEZ Act and Rules, with the Government evaluating outcomes based on monthly reports submitted by Development Commissioners, who are appointed by the Government to oversee the functioning, approval, and compliance of SEZ units. Further strengthening the policy framework, the SEZ Rules, 2006 were amended in June 2025 to facilitate the establishment of SEZs exclusively for the manufacturing of semiconductors and electronic components.
SEZ for Manufacturing of Semiconductors & Electronic Components
In June 2025, the Government notified two new SEZs – one at Sanand, Gujarat, and another at Dharwad, Karnataka – for the manufacturing of semiconductors and electronic components, respectively.
Semiconductors & Electronic Component sectors are capital-intensive in nature and often witness longer gestation periods before achieving profitability. To this accord, necessary amendments of setting up SEZs exclusively for manufacturing of semiconductors and electronics components have been introduced to encourage pioneering investments and strengthen policy support.
The amendments of the SEZ Rules have been made with respect to minimum land requirement to set up an SEZ exclusively for manufacturing of semiconductors and electronics components, relaxation in encumbrance norms allowing area mortgaged or leased to Government entity to be eligible for establishment of an SEZ, to enable DTA supply of semiconductor products and inclusion of value of goods received free of cost in Net Foreign Exchange (NFE) calculations, respectively.
Collectively, these measures aim to generate high-skilled employment, expand domestic manufacturing capacity in critical high-technology sectors, and reduce India’s dependence on semiconductor and electronic component imports.
Key SEZ Incentives & Facilities to Attract Domestic & Foreign Investment
SEZs offer a competitive and investor-friendly policy framework designed to promote exports, attract domestic and foreign investment, and enhance ease of doing business. Through a combination of fiscal incentives, tax benefits, and streamlined regulatory approvals, SEZs provide a conducive environment for businesses to scale operations efficiently while maintaining global competitiveness.
The incentives and facilities offered to the units in SEZs for attracting investments include:
Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units.
Exemption from Central Sales Tax, Service Tax and State sales tax. These have now subsumed into GST and supplies to SEZs are zero rated under IGST Act, 2017.
Other levies, if exempted by the respective State Governments.
Single window clearance for Central and State level approvals.
SEZs: Gateways to India’s Next Wave of Growth
Over the decades, SEZs in India have evolved into powerful gateways to one of the world’s fastest-growing and opportunity-rich economies. From port-led hubs such as Mundra Port and Kandla Port to sector-focused ecosystems like Sri City and GIFT City, each SEZ offers a distinct value proposition for global and domestic investors alike.
With world-class infrastructure, stable policy support, and seamless access to domestic and international markets, SEZs create a strong foundation for sustainable, long-term growth. They ease market entry, accelerate operationalization, and integrate businesses into India’s expanding trade and industrial networks. Fiinews.com
