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New Delhi, Nov 10 (KNN) India is weighing changes to its Special Economic Zone (SEZ) framework to ease restrictions between export zones and the domestic market, in an effort to strengthen manufacturing and boost exports amid global trade uncertainty. The discussions, led by the Prime Minister’s Office (PMO) in consultation with the commerce and revenue departments, aim to make SEZs more competitive by enabling smoother movement of goods and services between these enclaves and the domestic tariff area. Officials familiar with the deliberations said proposals under review include rationalising customs duties on supplies from SEZs to the domestic market, permitting payment in Indian rupees for domestic services provided by SEZ units, and allowing domestic manufacturers to send goods into SEZs for outsourcing, according to ET. These changes would require amendments to the existing SEZ framework, first introduced in 2000 and further institutionalised through the SEZ Act of 2006. SEZs operate as duty-free zones considered outside India’s customs territory, with imports exempt from licensing requirements. However, domestic sales currently attract full customs duties and are treated as imports. The government is examining whether easing these rules could help SEZ-based manufacturers scale up operations and achieve greater economies of scale. In FY25, SEZs contributed Rs 14.57 lakh crore in goods exports — about one-fifth of India’s total exports — from nearly 6,300 units across 276 operational zones, marking a 7.4 percent increase over the previous year. Officials emphasised that the discussions are at an early stage but stressed the need for a responsive and flexible policy framework to support businesses in a volatile global environment.
