The government has approved the proposals from Micron Semiconductor Technology India and Hubballi Durable Goods Cluster (Aequs Group) for setting up SEZs for manufacturing of semiconductors and electronic components.

Micron plans to set up its SEZ facility in Sanand, Gujarat, covering an area of 37.64 hectares with a projected investment of Rs 13,000 crore, while Aequs is set to develop its SEZ in Dharwad, Karnataka, spanning 11.55 hectares for the production of electronic components with an estimated investment of Rs 100 crore.

This decision comes after the relaxation of certain SEZ regulations aimed at promoting semiconductor and electronics component manufacturing.

"Subsequently, the Board of Approval for SEZs has accorded approval to the proposals received from Micron Semiconductor Technology India Pvt Ltd (MSTI) and Hubballi Durable Goods Cluster Private Ltd (Aequs Group) for setting up SEZs for manufacturing of semiconductors and electronic components, respectively," the commerce ministry  says.

Given that manufacturing in these areas requires significant capital investment, relies heavily on imports, and has longer periods before achieving profitability, modifications to the regulations have been implemented to encourage groundbreaking investments and enhance manufacturing in these advanced technology sectors.

According to a regulatory change, a Special Economic Zone (SEZ) established specifically for the production of semiconductors or electronic components will now need a minimum contiguous land area of just 10 hectares, down from the previous requirement of 50 hectares.

Additionally, the value of goods received and supplied without charge will now be factored into the calculations for Net Foreign Exchange (NFE).

 

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Furthermore, changes have been made to Rule 18 of the SEZ Rules, permitting SEZ units in the semiconductor and electronic component manufacturing sectors to also supply products domestically to the Domestic Tariff area after the payment of applicable duties.