The Union Commerce and Industry Minister, Piyush Goyal, of the Indian government, has embarked on the exercise of considering various proposals that are aimed at bringing key relief to Special Economic Zones (SEZs). This government initiative is directly oriented to greatly increase the output and exhaust the full capacity of the areas, which should become a possible change in policy that could reorganize the role of SEZs in the national economy. The Minister announced this significantly when he paid a visit to the Brandix textile units based in the Andhra Pradesh SEZ, as he was also attending the highly regarded CII Partnership Summit 2025 in Anakapalli.

Specific proposals and legal structure

At the center of the current debates lie the concrete measures, which have been offered by industry representatives, who traditionally demanded more flexibility in domestic sales. The most effective suggestion that is currently being discussed is the option of allowing SEZ units to offer their manufactured goods in the domestic tariff region duty-free. This would be a radical shift in the way the SEZ-DTA transactions are handled by the existing regulatory framework. The Minister affirmed that the government is seriously looking into all proposals, including this vital provision of duty-foregone domestic sales.

The existing legislation made SEZ units a foreign territory with the sole aim of trade and customs. Although this framework enables the firms operating at SEZs to import key raw materials and inputs without any payment of duty, the finished products are highly constrained in their subsequent transfer to the domestic market. Currently, SEZ units are only allowed to sell their finished goods within the country on the condition of paying the relevant duties on the output.

They are either to be exported to the international markets or to be sold in their home country, and the necessary duties are to be paid. Industry groups have been loud in their demand to relax these requirements, citing that the existing requirement inhibits their capacity to be responsive to the market requirements in the country. Minister Goyal assured the stakeholders that whatever course of action would be taken would always be decided through elaborate inter-ministerial consultations, in making sure that whatever decision would be arrived at is the most desirable outcome in the interests of both the SEZ units and the DTA units.

Simultaneously, with the reviews of the policies, the Commerce Ministry is undertaking tangible actions to enhance the physical infrastructure and operating standards of the zones. The Minister asked SEZ Commissioners of the whole country to convene a special meeting in the near future.

Visits to the Brandix Park and Andhra Pradesh MedTech Zone will be required on the agenda of this meeting. They have been specifically located to act as a yardstick of infrastructure standards. The study tour aims to enable the commissioners to critically examine the infrastructure quality and learn best practices that may result in upgrading all the Indian SEZs into world-class facilities, in support of the advancement push towards higher production and competitiveness.

Conclusion

The announcement that the government is undertaking an active effort to seek relief mechanisms for SEZs is a point of tremendous development of India’s export-oriented manufacturing policy. Innovated by the relentless demands of government elites in the industry and awareness of the unexploited possibilities of duty-substitution, the plans, including the significant step in the direction of duty-foregone domestic sales, may potentially transform the economic calculus of doing business in an SEZ. With the government already initiating inter-ministerial consultations and taking measures to benchmark and upgrade infrastructures, the SEZ sector seems to have a strategic overhaul that will help increase output, address gaps in structures, and ensure that these zones contribute to the overall economic strength and growth in India.