The draft seeks to amend the SEZ Act, 2005, to allow these units to receive payments in Indian rupees for services provided to domestic customers. “A draft note is under inter-ministerial consultation,” an official said.
The current provision under Section 2(z) of the Act mandates that proceeds from SEZ-to-DTA supplies of services must be realised in foreign exchange, although there is no such requirement for the supply of goods to DTA entities.
Industry has sought rupee-denominated payments for strategic services such as aerospace, defence, maintenance, repair and overhaul, and advanced engineering, as the prevailing SEZ conditions make it difficult to provide such services domestically from these enclaves.
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The amendment is aimed at aligning the definition of services with the goods and services tax law, sources said. “Foreign companies take more than a year whereas an Indian unit can complete the same work in a little over eight days, which increases transaction costs as DTA entity has to buy foreign currency on payment of commission to the authorised dealer bank and then again SEZ unit has to convert this foreign currency in rupees on commission to the bank,” said an industry representative.
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Several public sector undertakings, particularly in the defence and space sectors, are currently unable to procure services because they are required to make payments in dollars, which is expensive. Total exports from SEZs declined to $133.45 billion in 2025-26 from $172.07 billion in 2024-25. The country has 276 operational SEZs, with 6,695 units.