Amid Calls For Deregulation, Government Eases SEZ Rules For Chips, Electronic Manufacturing

The government has relaxed land norms for special economic zones which want to exclusively set up manufacturing units for semiconductors or electronic components, according to a gazette notification.

Earlier, if SEZs had to set up for chips or electronic components manufacturing, they would require a contiguous land area of 50 hectares. This has now been reduced to 10 hectares.

The notification specified that electronic components include display module sub-assembly, camera module sub-assembly, battery sub-assembly, various types of other module sub-assemblies, printed circuit board, li-ion cells for batteries, mobile and information technology hardware components, hearables and wearables.

The notification also said the condition of encumbrance-free area can also be eased in cases where the area is mortgaged or leased to the central or state government, or their authorised agency.

"By liberalizing the policy and aligning it with the realities of land availability and global competitiveness, the government has reinforced India’s ambition to become a global electronics manufacturing destination," said Ashok Chandak, President, India Electronics and Semiconductor Association.

The latest move by the government ties in with the Chief Economic Advisor V Anantha Nageswaran's calls for deregulation as a lever for growth.

In this year's Economic Survey, Nageswaran and his team wrote that regulations hurt businesses' ability to start and grow over time. "Regulations also hurt workers by discouraging job creation, limiting wages and encouraging informal employment."

The survey called many current regulations "gold-plated", overly complex and unrealistic, which assume excessive compliance capabilities.