June 4, 2025 in a significant move aimed at strengthening India’s ambition to become a global hub for electronics and semiconductor manufacturing, the Central Government has duly declared Special Economic Zones (Amendment) Rules, 2025. The amendments introduce key reforms to the existing Special Economic Zones Rules, 2006 aimed at promoting modern manufacturing, relaxing land principles, and enhancing export procedures within SEZs.

The amended rules were published in the Official Gazette and came into force immediately after the notification. The amendments are expected to open up new opportunities for companies working in high-tech sectors, mainly those involved in the manufacture of semiconductors and electronic components.

New Land Norms for Semiconductor SEZs

One significant amendment includes reducing the minimum land requirement for Special Economic Zones that are exclusively dedicated to the manufacture of semiconductors or electronic components. The new rules minimize the mandatory adjacent area to 10 hectares, a noteworthy change from previous requirements. Its purpose is to boost more focused and small-scale semiconductor projects without conceding regulatory standards.

This amendment also magnifies the definition of electronic components. It now contains display module sub-assemblies, camera modules, battery units, printed circuit boards, lithium-ion battery cells, IT hardware components, and new-age devices like wearable and hearables.

Greater Flexibility in Land Ownership

To further streamline the SEZ development process, the rules now permit for the relaxation of encumbrance free land requirement in cases where the area is forfeited or leased to the Central or State Government, or its official agencies. This provision is estimated to mainly benefit public-private partnerships and industrial groups that often face legal or financial burdens in land acquisition.

Simplified Procedures for Export and Transfers

Under the amended Rule 18, SEZ units now enjoy greater operational flexibility in handling their finished goods. Units may export finished products, transfer them to Customs Bonded Warehouses operated by overseas entities or supply them to the Domestic Tariff Area (DTA) upon payment of applicable duties. Transfers to Free Trade and Warehousing Zones (FTWZ) are also now allowed. These modifications simplify logistics and minimize barriers to supply chain movement, harmonizing SEZ rules with existing business practices.

Revised Net Foreign Exchange Calculations

Another notable update affects units offering manufacturing services in the semiconductor sector. The value of goods received or supplied on a free basis will now be included in Net Foreign Exchange (NFE) calculations. This value shall be determined in accordance with applicable customs valuation rules. The purpose of this review is to better obtain the actual value addition by these service units and ensure transparent export accounting.

Land Norms Eased for IT and ITeS SEZs

In addition to enhancing semiconductor production, the amendment also supports India’s digital economy. The minimum land requirement for Information Technology and IT-driven services SEZs has been condensed from 20 hectares to just 4 hectares. This is likely to benefit small and medium-sized tech firms, making SEZ participation more comprehensive and accessible.

These reforms reflect the government’s proactive stance in promoting technology-based manufacturing and export-led growth. By minimizing bureaucratic bottlenecks and aligning SEZ activities with industry requirements, SEZ Amendment Rules, 2025 support India's commitment to 'Make in India, Digital India' and its wider semiconductor mission.