Commerce Ministry to Review SEZ Reforms on June 30

Key Issues for Discussion

The meeting is expected to consider the following proposals:

· Allowing INR payments for services provided by SEZ units to the Domestic Tariff Area (DTA).

· Permitting job work by SEZ units for DTA units without requiring a direct export linkage.

· Facilitating import substitution to encourage domestic manufacturing.

· Reforms in Free Trade Warehousing Zones (FTWZs) to improve their competitiveness.

· Ease of Doing Business (EoDB) measures to simplify compliance and operational procedures for SEZ developers and units.

Harmonisation of Export Promotion Schemes

The government is examining ways to align various export promotion schemes under a more coherent policy framework, including:

· Special Economic Zones (SEZs)

· Export Oriented Units (EOUs)

· Manufacturing and Other Operations in Warehouse (MOOWR)

· Advance Authorisation (AA)

· Export Promotion Capital Goods (EPCG)

· Duty Free Import Authorisation (DFIA)

The objective is to reduce policy overlaps, simplify compliance, and provide exporters with a more streamlined regulatory environment.

SEZ 2.0 Policy

A 17-member committee has been constituted to recommend comprehensive reforms to India's SEZ policy. The committee is preparing a concept paper that will serve as the roadmap for the proposed SEZ 2.0 framework.

The reforms are considered necessary because the SEZ Act, 2005 was enacted under a very different global trade environment. Since then, international supply chains, trade agreements, manufacturing strategies, and investment patterns have evolved significantly.

Why the Reforms Matter

The review has gained importance due to the declining performance of SEZ exports.

Indicator	2024-25	2025-26
SEZ Exports	US$172.07 billion	US$133.45 billion

India currently has:

• 276 operational SEZs
• 6,695 operating units

The proposed reforms aim to make SEZs more competitive, attract fresh investment, boost exports, integrate with global value chains, and better align India's export promotion framework with current economic realities.

[ABS News Service/29.06.2026]

Commerce ministry has convened a meeting of stakeholders on June 30 to discuss issues related to special economic zones (SEZs), including reforms aimed at harmonising export promotion schemes and easing business operations in the enclaves.

The meeting will focus on issues related to the harmonisation of export promotion schemes and SEZ reforms, an official told news agency PTI.

The issues expected to figure in the deliberations include INR payment for SEZs to domestic tariff area (DTA) services; job work by SEZ units for DTA without linkage to exports; import substitution; reforms in free trade warehousing zones; and measures to further promote ease of doing business in these enclaves.

The government has constituted a 17-member committee to recommend broader reforms to the SEZ policy.

It is also undertaking a background study on harmonising various export promotion schemes, including SEZs, export-oriented units (EOUs), Manufacturing and Other Operations in Warehouse (MOOWR), Advance Authorisation (AA), Export Promotion Capital Goods (EPCG), and Duty Free Import Authorisation (DFIA).

The committee will submit a concept paper recommending a roadmap for broad-based and comprehensive reforms under a proposed SEZ 2.0 policy.

The move assumes significance as the SEZ law was enacted in 2005 under a different trade policy environment, while global trade conditions have since undergone major changes.

SEZs are treated as foreign territories for laws relating to customs, including trade and import duties, with restrictions on duty-free domestic sales.

Exports from these zones declined to $133.45 billion in 2025-26 from $172.07 billion in 2024-25. India currently has 276 operational SEZs housing 6,695 units