Amid the growing geopolitical turmoil due to the ongoing West Asia crisis, the government of India announced certain duty benefits for special economic zones (SEZs), a move which would provide support to units in these enclaves amid global uncertainties.
As an one time move, India has allowed SEZ units to increase sales in the domestic market with marginal customs duty concessions, in a move aimed at supporting exporters grappling with weak global demand. The move will be effective from April 1 and will remain valid for a year until March 31, 2027.
Under the revised framework, goods manufactured in SEZs when sold domestically will attract slightly lower Basic Customs Duty (BCD), with select products also benefiting from reduced Agriculture Infrastructure and Development Cess (AIDC). The measure will be applicable for a wide range of products—from chemicals and fertilizers to textiles, footwear, and machinery. However, the relief remains limited—often around 1%—and does not extend to Integrated Goods and Services Tax (IGST), which continues to apply.However, petrol and diesel have been excluded from the scheme, although certain refinery outputs such as petroleum coke are eligible.
The amendment has also introduced some stringent eligibility criteria. Only units that commenced production on or before March 31, 2025, can avail of the benefit. Additionally, these units must ensure a minimum value addition of 20% and restrict domestic sales to 30% of their highest export performance in the preceding three financial years. Compliance will be monitored through audits under existing SEZ regulations.
The Union Budget 2026–27 introduced a key one-time measure allowing eligible Special Economic Zone (SEZ) manufacturing units to sell goods in the domestic tariff area (DTA) at concessional duty rates.
Amid the growing geopolitical turmoil due to the ongoing West Asia crisis, the government of India announced certain duty benefits for special economic zones (SEZs), a move which would provide support to units in these enclaves amid global uncertainties. As an one time move, India has allowed SEZ units to increase sales in the domestic market with marginal customs duty concessions, in a move aimed at supporting exporters grappling with weak global demand. The move will be effective from April 1 and will remain valid for a year until March 31, 2027.
Under the revised framework, goods manufactured in SEZs when sold domestically will attract slightly lower Basic Customs Duty (BCD), with select products also benefiting from reduced Agriculture Infrastructure and Development Cess (AIDC). The measure will be applicable for a wide range of products—from chemicals and fertilizers to textiles, footwear, and machinery. However, the relief remains limited—often around 1%—and does not extend to Integrated Goods and Services Tax (IGST), which continues to apply.However, petrol and diesel have been excluded from the scheme, although certain refinery outputs such as petroleum coke are eligible.
The amendment has also introduced some stringent eligibility criteria. Only units that commenced production on or before March 31, 2025, can avail of the benefit. Additionally, these units must ensure a minimum value addition of 20% and restrict domestic sales to 30% of their highest export performance in the preceding three financial years. Compliance will be monitored through audits under existing SEZ regulations.
The Union Budget 2026–27 introduced a key one-time measure allowing eligible Special Economic Zone (SEZ) manufacturing units to sell goods in the domestic tariff area (DTA) at concessional duty rates.