Last week, the government announced a one-time relief measure for SEZ units, allowing them to sell goods in domestic markets at a lower customs duty for one year due to the West Asia conflict. It capped the domestic sales at 30% of their highest export value in the past three years.
Only 13% of the domestic tariff area (DTA) sales would get a marginal 1% concession, according to the industry. “The industry is disappointed by zero concession to 80% of DTA sales and 13% of the DTA sales getting a marginal 1% concession,” SEZ developers and units said in a representation to the commerce and industry ministry.
The industry has estimated benefits of $137 million on total DTA sale of $30.6 billion for top 200 HSN or tariff codes in 2023-24. As per the analysis, the reduction applies to $5.7 billion of DTA sales in 2023-24.
The government expects the measure to benefit about 1,200 SEZ manufacturing units.
The measure for SEZs was announced in the budget for 2026-27 to shield exporters from higher US tariffs but exporters termed it a timely move amid the Iran war that enabled units in SEZs to use idle capacity. “There will hardly be any takers for the scheme. Further, there will not be any import substitution for the imports made under Free Trade Agreements (FTAs). There is huge compliance burden too,” the industry said.