New Delhi: The Union Budget 2026-27 announced SEZ reforms to allow concessional domestic sales by manufacturing units, aiming to boost exports and improve competitiveness.
Officials said the one-time measure permits eligible Special Economic Zone units to sell a limited share of output in the Domestic Tariff Area at reduced duty rates. The quantity will be capped as a proportion of their exports to maintain the export-oriented framework.
The government stated that these SEZ reforms aim to improve capacity utilisation and reduce export costs. Authorities added that regulatory changes will ensure a level playing field for Domestic Tariff Area units.
India currently has 368 notified SEZs as of February 28, 2026. Officials said these zones continue to drive exports, investment, and employment across sectors.
Exports from operational SEZs crossed Rs 11.70 lakh crore in 2025-26 till December. This marked a 32.02% increase compared to the same period in 2024-25.
SEZ reforms target growth, investment and employment
Officials said SEZ reforms are designed to strengthen India’s position in global value chains. They noted that SEZs employ over 31.73 lakh people and have attracted investments of Rs 7.86 lakh crore as of December 2025.
In addition, the Budget extended incentives for cloud and data centre operations in SEZs. Authorities said this move is expected to attract global technology firms and manufacturers.
The government also highlighted policy support through the SEZ Act, 2005 and Rules, 2006. These provide simplified approvals, duty-free imports, and tax benefits to investors.
Moreover, recent amendments in June 2025 enabled semiconductor and electronics manufacturing in dedicated SEZs. Officials said these steps will reduce import dependence and create high-skilled jobs.
They added that SEZ reforms will enhance investor confidence while supporting sustainable export-led growth.
