FM proposes one-time measure to facilitate sales from SEZs to domestic market at concessional duty

New Delhi, Finance Minister Nirmala Sitharaman on Sunday proposed a special one-time measure to facilitate sales by eligible manufacturing units in special economic (SEZs) to the domestic tariff area at concessional rates of duty.

It was a demand from the industry as they were facing issues related to utilisation of capacities in the SEZ units due to high tariffs in the US.

"To address the concerns arising about utilization of capacities by manufacturing units in the SEZs due to global trade disruptions, I propose, as a special one-time measure, to facilitate sales by eligible manufacturing units in SEZs to the DTA at concessional rates of duty," she said in her Budget speech.


The quantity of such sales will be limited to a prescribed proportion of their exports.

She said that necessary regulatory changes will be undertaken to operationalise these measures while ensuring level-playing field for the units working in the DTA.

The industry had earlier requested the Centre to permit them sale of products manufactured in SEZs in the domestic market on payment of duty foregone on inputs as that would help promote value addition.

At present, units in SEZs are allowed to sell their products in the Domestic Tariff Area (DTA or domestic market) on payment of duties on an output basis (finished goods).

These zones are treated as foreign territories for trade and duties, with restrictions on duty-free domestic sales.

Companies operating within SEZs are allowed to import materials and components duty-free, with the condition that the finished goods produced are meant to be exported out of India and sold in the Indian domestic market on payment of applicable duties on the output.

SEZs have emerged as an important contributor to India's exports. Total exports from these zones stood at USD 176.6 billion in 2024-25.