Govt announces easing of SEZ rules to promote chips, electronics component manufacturing

Aimed at boosting high-tech manufacturing, including semiconductors and electronic components in special economic zones (SEZs), the government has unveiled a series of policy relaxations. According to a notification issued by the Ministry of Commerce and Industry, the minimum land requirement for setting up such SEZ units has been reduced from 50 hectares to 10 hectares. This move is expected to attract many smaller and mid-sized companies to enter the space and invest in India’s growing chip and component manufacturing ecosystem.

The relaxed norms will apply to sectors including semiconductors, display module sub-assemblies, various other module sub-assemblies, printed circuit boards, lithium-ion battery cells, mobile and IT hardware components, hearables, and wearables. These categories cover some of the most in-demand parts in modern technology, which indicates that India wants to become a strong player in the global electronics supply chain.

Earlier, the SEZs were required to be “encumbrance-free,” meaning the land had to be completely free of any legal disputes or debt. But now if the land is already mortgaged or leased to the Centre or state government or their authorized agencies, it can be used to set up an SEZ.  

Stocks like Havells India, Polycab, and Dixon Technologies may see increased investor interest after the central government announced big changes to the SEZ rules. These changes are aimed at boosting high-tech manufacturing, especially in the semiconductor and electronics sectors, across the country.

SEZs are areas meant to attract foreign and domestic investment for economic development of the country.