More than a quarter of the notified special economic zones (SEZs) in the country are non-operational, the government informed Parliament on Tuesday.
According to data presented by the Ministry of Commerce and Industry, 95 of the 372 notified SEZs are non-operational. Haryana, Telangana and Karnataka accounted for the highest number of non-operational SEZs, including those under construction, with each having more than 10 such zones.
“The time taken in operationalising SEZs could be due to several reasons, including time taken for getting approvals from statutory/State government bodies, adverse business climate due to shifts in the global economic scenario and changes in fiscal incentives,” Minister of State for Commerce and Industry Jitin Prasada told Parliament.
As of March 2026, there were 436 approved SEZs, of which 372 had been notified and 277 were operational, according to the data. Tamil Nadu and Telangana had the highest number of notified SEZs, with 58 and 50, respectively.
Investment in SEZs declined by nearly 3% in FY26 to ₹7.59 lakh crore from ₹7.83 lakh crore in FY25. However, investment has increased by nearly 17% over the past five years.
Despite the decline in investment, exports from SEZs continued to rise, increasing by nearly 12% in the last one year.
“With a view to ensuring the effectiveness, and reviving and improving investment and exports from SEZs, the Government undertakes various measures, including denotification of SEZs, from time to time to remove operational challenges in SEZs in consultation with different stakeholders,” Prasada said.
