Policy Reforms Announced
- Relaxation of SEZ norms specifically for semiconductor and electronic component manufacturing.
- Objective: Boost high-tech manufacturing, attract capital-intensive industries, and reduce import dependence.
Relevance : GS 2(Governance) ,GS 3(Minerals , Manufacturing)
Key Amendments to SEZ Rules
- Minimum Land Requirement Reduced:
- Rule 5 amended: Minimum contiguous land area reduced from 50 hectares to 10 hectares.
- Aims to lower entry barriers and attract more investors.
- Permission to Sell Domestically:
- Rule 18 amended: SEZ units can now sell to the domestic market (DTA) after paying applicable duties.
- Shifts SEZs from being purely export-oriented to hybrid export-domestic supply hubs.
- Flexibility in Land Encumbrance:
- Rule 7 amended: SEZ land can be mortgaged or leased to government agencies; no need for encumbrance-free land.
- Helps firms access financing without regulatory bottlenecks.
Major Investment Approvals Post-Reform
- Micron Semiconductor Technology India: To set up a ₹13,000 crore unit in Sanand, Gujarat.
- Hubballi Durable Goods Cluster Pvt. Ltd. (Aequs): To invest ₹100 crore in Dharwad, Karnataka.
- Total approved investment: ₹13,100 crore.
Strategic and Economic Significance
- Semiconductors and electronics are:
- Capital-intensive, import-dependent, and have long gestation periods.
- India aims to:
- Build a resilient semiconductor ecosystem.
- Reduce reliance on foreign chip imports.
- Position itself as a global electronics manufacturing hub.
Expected Benefits
- Encourages pioneering investments in high-tech sectors.
- Boosts Make in India and Atmanirbhar Bharat goals.
- Facilitates the creation of high-skilled jobs in manufacturing and R&D.
- Strengthens supply chain resilience in strategic sectors like semiconductors.
Potential Challenges Ahead
- Timely infrastructure support and clearances.
- Ensuring availability of skilled manpower.
- Competitive policy support compared to China, Taiwan, or Vietnam
