The measure for SEZs was announced in the Budget FY27 to shield exporters from higher American tariffs but exporters termed it a timely move amid the ongoing crisis and would enable units in SEZs to use idle capacity. “The goods for which exemption under this notification are claimed should have been manufactured by the unit in the SEZ and should have undergone a minimum value addition of 20%,” the finance ministry said in a notification
The relief will apply from April 1, 2026, to March 31, 2027, and expected to benefit approximately 1,200 SEZ manufacturing units. However, the benefits will not apply to units operating in Free Trade Warehousing Zones.
As per the notification, SEZ businesses can sell a capped share of products including chemicals, engineering goods, heavy machinery, textiles, footwear, pharmaceuticals, electronics and consumer items in the domestic tariff area (DTA) while paying reduced customs duties, instead of the full import tax applied to foreign goods.
“FAQs might be issued soon on this subject,” said an official.
The reduced duties vary by product, with customs rates of about 5-12.5%. Under the notification, goods made in SEZs and sold in the domestic market will face slightly lower Basic Customs Duty, and in some cases reduced Agriculture Infrastructure and Development Cess. “This is a timely and well-considered measure that balances the challenges faced by SEZ units with the need to safeguard domestic industry,” said Ajay Sahai, director general, Federation of Indian Export Organisations.
Industry chamber CII said the continuation of RoDTEP at existing rates and value caps will help sustain export competitiveness, especially for sectors facing cost pressures and volatile global demand. “Equally significant is the one-time relief for SEZ units by permitting limited DTA sales at concessional duty rates… it will enable units to better utilize capacity, support liquidity, and safeguard employment, while retaining their export orientation,” said Chandrajit Banerjee, Director General, CII.