In a renewed push for making Semiconductors and Electronics in India, the Ministry of Commerce and Industries (MOCI) has amended the SEZ rules to allow relaxations. The MOCI has notified amended SEZ rules to promote semicon and electronics manufacture.

The biggest change under the amended SEZ Rules, is to lower the contiguous land requirement from 50 hectares to 10 hectares. This relaxation is available for establishing an SEZ, exclusively, for manufacture of semiconductors and electronics.

The relaxations will apply to a range of electronics and semiconductor-related products, including display module sub-assemblies, camera modules, battery packs, printed circuit boards, lithium-ion cells, and components for mobile devices, IT hardware, hearables, and wearables.

Additionally, in meeting a key industry demand, the amended rules also provided clarity on the computation of Net Foreign Exchange. To be eligible for benefits, an SEZ needs to be a net foreign exchange earner over a period of five years. Under the earlier rules, goods received or supplied “Free of Cost” were not always included in Net Foreign Exchange.

The amended rules now provide clarity that goods received or supplied “Free of Cost” will be included. Goven the complex value chains for products like semiconductors, this clarity will help in a more accurate indication of Net Foreign Exchange.

Under amended rules, finished products from manufacturing entities inside SEZ now can also be supplied to Domestic Tariff Area on payment of duties. Rules also provide for finished products to be transferred to a free trade and warehousing zone in the same or another SEZ.