Govt eases SEZ rules for semiconductor, electronics manufacturing; Micron, Aequs get nod

NEW DELHI : The Government, on Monday, notified key reforms in Special Economic Zone (SEZ) rules to promote investment in semiconductor and electronics component manufacturing. The changes aim to support sectors that are capital-intensive, import-dependent, and have long gestation periods before becoming profitable.

The revised rules, notified by the Department of Commerce on June 3, 2025, include amendments to Rules 5, 7, 18, and 53 of the SEZ Rules, 2006. Under the amended Rule 5, SEZs set up exclusively for semiconductor or electronics component manufacturing will now require a minimum contiguous land area of only 10 hectares, down from 50 hectares earlier.

Amendment to Rule 7 allows the Board of Approval to relax the requirement for SEZ land to be encumbrance-free if it is mortgaged or leased to the central or state government or their authorised agencies.

As per the amended Rule 53, the value of goods received and supplied on a free-of-cost basis will now be included in Net Foreign Exchange (NFE) calculations, using applicable customs valuation rules.

Changes to Rule 18 will allow SEZ units in semiconductor and electronics component manufacturing to supply to the Domestic Tariff Area (DTA) after paying the required duties.

Following the notification, the Board of Approval has cleared two SEZ proposals. Micron Semiconductor Technology India Pvt Ltd (MSTI) will set up a facility in Sanand, Gujarat, over 37.64 hectares with an investment of ₹13,000 crore.

Hubballi Durable Goods Cluster Private Ltd (Aequs Group) will establish an SEZ in Dharwad, Karnataka, across 11.55 hectares, investing ₹100 crore to manufacture electronics components.