Government Announces SEZ Reforms to Bolster High-Tech Manufacturing
The central government has introduced a series of policy adjustments for Special Economic Zones (SEZs) aimed at promoting advanced manufacturing in the semiconductor and electronic components sectors. These reforms are intended to attract innovative investments, simplify regulatory procedures, and enhance the nation’s role in the global semiconductor value chain.
Key Reforms Introduced
A significant revision involves amending the existing rule that governs the minimum contiguous land area required for SEZs dedicated to semiconductor or electronics component production. The new regulation reduces this land requirement dramatically from 50 hectares to just 10 hectares, making it easier for developers to establish specialized zones.
Another important change under the updated policies concerns the rules for land encumbrance. The amendment permits the Board of Approval to relax the encumbrance-free land norms when property is either mortgaged or leased to central or state governments, or their designated agencies.
Additionally, the government has revised the customs valuation procedures. Under the modified rule, the value of goods received and supplied free of cost will now be considered when calculating the Net Foreign Exchange. This change is expected to offer a more accurate reflection of the overall economic activity within the SEZs.
Furthermore, SEZ units operating in these strategically important sectors will now have the flexibility to sell their goods in the domestic market after meeting the relevant duty requirements. This shift is designed to integrate domestic and international market dynamics, ultimately boosting the competitiveness of India’s high-tech manufacturing industry.
By streamlining regulations and reducing barriers to entry, these policy relaxations aim to foster an environment that encourages growth and positions the country as a significant player in the global semiconductor ecosystem.
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