Government Reduces Minimum Land Requirement Threshold For Semiconductor & Electronics Plants In SEZs

Reaffirming its resolution to make India a semiconductor manufacturing hub and bolster domestic electronics manufacturing, the GOI eased land norms, thereby paving the way for companies in this segment to easily set up factories in SEZs dedicated to semiconductors and electronic components. Companies in this segment will now be able to set up factories in small parcels (reduced to 10 hectares to 50 hectares).

This move is expected to bring a large number of MSMEs to the forefront of semiconductor manufacturing as the cost of setting up businesses will be reduced considerably. A number of states will be affected by this new regulation, including Goa, Uttarakhand, Himachal Pradesh, Nagaland, Manipur, Mizoram, Arunachal Pradesh, Tripura, Meghalaya, Sikkim, Ladakh, Puducherry, Andaman and Nicobar, Lakshadweep, Daman and Diu, and Dadra and Nagar Haveli.

Key Changes in SEZ Land Requirements

The revised Special Economic Zones (Amendment) Rules, 2025, were notified on June 3 and have eased the minimum land requirement for setting up a unit in SEZs specifically meant for semiconductor and electronic component manufacturing. It has been slashed from 50 hectares to 10 hectares. The threshold has been reduced from 20 hectares to 4 hectares for multi-product SEZs.

Focus on Attracting Investment Amid Global Supply Chain Shifts

The timing of this policy shift is critical as supply chains have witnessed massive disruptions and countries have looked for safer manufacturing bases. India aims at attaining self-dependency in semiconductor production, and by lowering land thresholds, the government aims to make it easier for companies, including startups, to establish facilities and scale operations in India.

More Autonomy for SEZ Manufacturers

Apart from land relaxation, the amendments also grant greater autonomy to SEZ-based manufacturers, allowing them increased flexibility in relocating or selling finished goods. These measures are expected to streamline operations and improve the ease of business for electronics sector firms.

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