The government has introduced a one-time relief measure allowing units in Special Economic Zones (SEZs) to sell goods in the domestic market at concessional customs duty, as it seeks to cushion the impact of global uncertainties.
Under the revised framework, SEZ units can sell locally by paying a reduced duty of around 5%–12.5%, compared to the earlier system where such sales attracted full import-equivalent duties. The relief will be available from April 1, 2026 to March 31, 2027.
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What this means for consumers:
- Selective price relief
Consumers may see lower prices in categories such as electronics, textiles and chemicals. Since SEZ units typically cater to export markets, this could also improve access to higher-quality, export-grade products at more competitive rates.
- Support for jobs
The policy allows companies to divert surplus production to the domestic market, helping utilise idle capacity. This, in turn, reduces the risk of factory shutdowns and supports employment in SEZs amid weak global demand.
- Lower reliance on imports
With more goods available locally, India could reduce dependence on expensive imports, especially at a time when global supply chains remain disrupted.
- Limited overall impact
That said, price benefits may not be widespread. The duty concession is not universal, and several sectors remain excluded to safeguard domestic manufacturers.
Why the government introduced the move
The initiative is aimed at helping SEZ manufacturers navigate a slowdown in exports by allowing limited access to domestic demand. The goal is to keep factories running efficiently while protecting jobs.
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Finance ministry sources described the move as “balanced”, noting that it provides flexibility to exporters while ensuring SEZs remain primarily export-focused. Domestic sales have been capped at 30% of a unit's highest export value over the past three years, they pointed out.
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The broader context
Traditionally, SEZs are treated as foreign territory, meaning any sale into India attracts full import duties. This policy marks a temporary shift by allowing concessional rates, but only as a targeted, short-term intervention.
The move follows Finance Minister Nirmala Sitharaman's Budget announcement of a one-time window to support SEZ units during a period of global disruption.
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