SEZ Rules 2025 Notified To Boost Semiconductor Manufacturing and Ease Land Norms

The Ministry of Commerce has notified the Special Economic Zones (Amendment) Rules, 2025 (SEZ Rules 2025).

The amendments are expected to provide a robust push to chip manufacturing and streamline operational processes within SEZs, aligning closely with the Make in India initiative and the India Semiconductor Mission.

Semiconductor Sector Gets Special Treatment

For the first time, the rules explicitly prioritize semiconductor fabrication and assembly/testing units in SEZs. A new provision under Rule 5 ensures:

• Fast-tracked land allotment for chip manufacturing units
• Relaxed norms for processing zones
• Preferential consideration by the Board of Approval (BoA)
• Synergy with central incentives, such as the Production Linked Incentive (PLI) scheme for electronics

This strategic focus aims to catalyse India's efforts to establish itself as a global semiconductor hub amid global supply chain shifts.

Key Changes Under SEZ (Amendment) Rules, 2025

Area	Amendment Highlights
Semiconductor Units	Special provisions introduced to prioritise chip manufacturing within SEZs
Land Norms	Developers can now utilise up to 25% of SEZ land for non-processing purposes — up from 15% earlier
Land Sub-division	Permitted with government approval, enabling flexible leasing and usage models
Green and Blue Economy	Priority accorded to units engaged in renewable energy, hydrogen, and ocean tech
IT/ITES Units	Work-from-home and hybrid models allowed for export-oriented IT/ITES SEZ units
De-notification Process	Made faster and more transparent via single-window clearance involving state coordination
Compliance Simplification	Developers allowed to self-certify built-up area compliance to expedite approvals
Digital Interface	Strengthened online portal for processing approvals, filing reports, and unit interaction

Land Use Norms Significantly Eased

A major highlight is the relaxation of land use restrictions for SEZ developers. The permissible limit for non-processing use — which includes residential, commercial, and social infrastructure — has been increased from 15% to 25%. This move supports the development of integrated townships within SEZs, making them more attractive for talent acquisition and long-term sustainability.

Industry experts view the amendments as a timely intervention that can boost investor confidence, facilitate ease of doing business, and lay the groundwork for India’s technological and industrial transformation.

Notification Details

Notification No. F. No. K-43022/150/2024-SEZ

Date: 3rd June, 2025

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