On Thursday, the Ministry of Commerce and Industry (MoCI) announced that Tata Semiconductor Manufacturing Private Limited has been granted a special economic zone (SEZ) in Dholera, Gujarat, to focus solely on electronic hardware and software, including information technology and related industries.
The SEZ, which spans 66.166 hectares and is expected to employ 21,000 people, is specifically engineered to facilitate the development of IT-enabled services, software, and hardware. It also features enabling infrastructure and a streamlined approval process to facilitate operations and logistics. The Indian government has announced the opening of its first chip production plant.
Prior to this, the government had amended the Special Economic Zones (SEZ) legislation and approved sector-specific SEZs with a focus on bolstering India’s semiconductor and electronics manufacturing environment. Following the government’s lead, these changes will build a semiconductor ecosystem that can compete on a global scale by encouraging investments with a high return on investment (ROI), making it easier for businesses to operate, and encouraging innovation.
In order to accommodate the specific needs of semiconductor and electronics manufacturers, the SEZ Rules, 2006 were significantly revised through a notice dated June 3, 2025. These revisions include a lowering of the minimum land requirement from 50 hectares to 10 hectares, more leeway in encumbrance norms, the inclusion of free-of-cost supplies in Net Foreign Exchange calculations, and the ability to sell domestically within the Domestic Tariff Area (DTA) upon payment of relevant duties.
The Board of Approval for SEZs has approved substantial proposals to set up SEZs for semiconductors and electronics, following through on these reforms.
The Sanand Special Economic Zone (SEZ) in Gujarat is set to be established by Micron Semiconductor Technology India Pvt Ltd for semiconductor assembly, testing, marking, and packaging at a cost of around Rs 13,000 crore, while Dharwad in Karnataka is to be the site of an electronic component manufacturing SEZ by Aequs Group. Along with CG Semi and Kaynes Semicon, the Hubballi Durable Goods Cluster is among the other approved plans. These programs aim to lessen reliance on imports, provide jobs for highly skilled individuals, and speed up the development of domestic value chains.
It is believed that these SEZs will help pave the way for a semiconductor ecosystem that is strong, competitive, resilient, and prepared for the future. India is being positioned as an emerging hub for semiconductor and electronics production, thanks to these initiatives, industry participation, and policy support, which are enabling the creation of integrated manufacturing clusters. This will strengthen domestic capabilities, the statement added.
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