The Commerce Ministry will convene a meeting of key stakeholders on June 30 to deliberate on a wide range of issues concerning Special Economic Zones (SEZs), as the government moves ahead with plans to modernise the country's export promotion framework and formulate a comprehensive SEZ 2.0 policy.
According to an official, the discussions will primarily focus on harmonising India's various export promotion schemes and identifying reforms that can make SEZs more competitive, investment-friendly and aligned with the country's evolving trade priorities.
The meeting comes at a time when the government is reviewing the effectiveness of the existing SEZ policy amid changing global trade dynamics, shifting supply chains and the need to improve India's export competitiveness.
Among the key issues expected to be discussed is allowing SEZ units to receive payments in Indian rupees (INR) for services provided to entities operating in the Domestic Tariff Area (DTA). Stakeholders are also likely to deliberate on permitting SEZ units to undertake job work for DTA companies without making such activities directly linked to exports, a move that could improve capacity utilisation and strengthen domestic manufacturing.
Other important agenda items include measures to promote import substitution, reforms in Free Trade Warehousing Zones (FTWZs), and additional steps to enhance ease of doing business within SEZs by simplifying operational procedures and reducing regulatory hurdles.
The stakeholder consultation forms part of the government's broader exercise to redesign India's export promotion architecture. To facilitate this process, the Centre has constituted a 17-member committee tasked with recommending structural reforms for Special Economic Zones and related export incentive schemes.
The committee is currently undertaking a detailed background study to examine how different export promotion mechanisms can be better aligned under a unified policy framework. The study covers several existing schemes, including Special Economic Zones (SEZs), Export-Oriented Units (EOUs), Manufacturing and Other Operations in Warehouse Regulations (MOOWR), Advance Authorisation (AA), Export Promotion Capital Goods (EPCG), and Duty-Free Import Authorisation (DFIA).
Based on its findings, the panel will prepare a concept paper outlining a roadmap for broad-based and comprehensive reforms that will form the foundation of the proposed SEZ 2.0 policy. The objective is to create a more flexible, simplified and globally competitive export ecosystem capable of supporting India's long-term manufacturing and trade ambitions.
Also read: As GST turns 10, focus shifts to AI-led compliance
Officials said the review has become necessary because the SEZ Act was enacted in 2005 under a very different global trade environment. Since then, international supply chains, trade agreements, manufacturing patterns and investment trends have undergone significant changes, requiring India to revisit its policy framework to remain competitive.
The government is also looking to ensure that different export promotion schemes complement one another rather than functioning in isolation, thereby reducing overlaps and providing greater clarity to businesses operating under multiple incentive regimes.
Under the existing framework, SEZs are treated as foreign territories for customs purposes. This allows units operating within these zones to import goods and raw materials without paying customs duties, although restrictions remain on duty-free sales into the domestic market.
India currently has 276 operational Special Economic Zones housing 6,695 business units engaged in manufacturing and services. These zones have played an important role in attracting investments, generating employment and boosting exports over the years.
However, exports from SEZs have witnessed a significant decline in the latest financial year. Outbound shipments from these zones fell to USD 133.45 billion in 2025-26, compared with USD 172.07 billion in 2024-25. The decline has prompted the government to accelerate policy reforms aimed at revitalising the sector, improving ease of doing business and making SEZs more responsive to the changing needs of global trade and investment.
Follow us
