India Considers SEZ Rule Changes to Boost Investment in Emerging Sectors
Key Ideas
  • Government in India is contemplating easing regulations in Special Economic Zones (SEZs) to attract more investment in sectors like green hydrogen, air cargo, MRO services, and space exploration.
  • Recent relaxations in SEZ rules for semiconductor and electronics manufacturing have facilitated significant investment approvals, benefiting projects in Gujarat and Karnataka.
  • Proposed changes aim to customize SEZ policies for different industries' needs, with a focus on flexibility to enhance appeal and accommodate sector-specific requirements like power sales for green hydrogen units.
  • The strategy involves a sector-specific approach to revitalize SEZ policies, aligning them with modern industries to leverage the underutilized infrastructure and stimulate economic growth.
In India, the government is considering amendments to regulations in Special Economic Zones (SEZs) to attract more investments in high-potential sectors such as green hydrogen, air cargo, MRO services, and space exploration. The goal is to align SEZ policies with the specific needs of these emerging industries to make them more appealing to investors. Recent relaxations in SEZ rules for semiconductor and electronics manufacturing have already led to significant investment approvals in states like Gujarat and Karnataka. For the green hydrogen sector, potential changes include allowing SEZ-based units to sell power outside the SEZ and revising rules on contiguous land requirements, considering the nature of green hydrogen projects. The government plans to tailor SEZ regulations based on the operational needs of each sector, recognizing that a one-size-fits-all approach may not be effective. While formal legislative amendments to the SEZ Act are in progress, the government is using notifications to introduce targeted changes promptly. The flexible, sector-specific approach is intended to rejuvenate India's SEZ policy and tap into the economic potential of underutilized SEZ infrastructure.
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