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Special Economic Zones in India

A Special Economic Zone (SEZ) is a geographical region that has economic laws that are more liberal than a country's domestic economic laws. The category 'SEZ' covers a broad range of more specific zone types, including, but not limited to:

SEZs in India are areas that offer incentives to resident businesses. SEZs typically offer competitive infrastructure, duty free exports, tax incentives, and other measures designed to make it easier to conduct business. Accordingly, SEZs in India are a popular investment destination for many multinationals, particularly exporters.

While India’s SEZs are similar to those, found in other parts of Asia, business leaders should seek to understand how different SEZ work as many have unique features. Many business leaders conduct market entry studies that compare site, resources, tax incentives, and costs before making site visits.

Incentives for setting up a business in an Indian SEZ

Some incentives for setting up a sourcing or manufacturing platform within an Indian SEZ include:

After making a shortlist of SEZs for further examination, investors may find that specific SEZs offer other advantages that complement their business plans in India.

Ultimately, however, the benefits of India’s SEZ policy have been substantial. It is one of the reasons why there is an increase in the number of foreign firms operating in India.

Exports, employment, and investment in SEZs

As per data from the Ministry of Commerce and Industry, from 2018-19 to 2020-21, 1096 units were registered in special economic zones in India. Exports by units in select SEZs are shown below.

Export Performance of Select SEZs in India


Name and location of the SEZ

Exports (In INR)





MEPZ(Chennai, Tamil Nadu)

1.866 billion

16.188 billion

43.964 billion


Cochin (Kerala)

12.492 billion

74.206 billion

194.318 billion


Noida(Uttar Pradesh)

13.587 billion

37.636 billion

65.505 billion



514 million

48.821 billion

134.359 billion


Vishakhapatnam(Andhra Pradesh)

2.728 billion

34.388 billion

99.928 billion


SEEPZ(Mumbai, Maharashtra)

2.565 billion

49.142 billion

149.664 billion


Falta (West Bengal)

207.2 million

2.179 billion

6.406 billion

Total :

33.96 billion

262.56 billion

694.15 billion

According to the Ministry of Commerce and Industry:

Choosing a location for a SEZ 

There are many SEZs for your company to choose from (a list of which can be obtained from the Department of Commerce’s website) and so deciding on which is best for you can often be a thorough process.

For companies directly sourcing from or manufacturing in India, the site should be well placed to acquire the raw materials needed for production, while at the same time being in an area suited for export.

SEZ and warehousing clusters in India

  1. Special Economic Zones and Warehousing Clusters in Delhi NCR

    The Delhi National Capital Region (NCR) hosts about 14 SEZs, which are primarily located in satellite cities like Gurugram (formerly Gurgaon, Haryana state) and Noida.

  2. Special Economic Zones and Warehousing Clusters in Mumbai

    The Mumbai area hosts at least seven SEZs across Mumbai and nearby cities like Navi Mumbai, and Thane.

  3. Special Economic Zones and Warehousing Clusters in Bengaluru

    The Bengaluru (formerly Bangalore) area hosts at least 18 SEZ, which are mostly located on the city’s outskirts.

    Meanwhile, Tamil Nadu has the highest number of operational SEZs (40), followed by Karnataka (31), and Maharashtra (30).

List of operational SEZs in Gujarat

List of operational SEZs in Karnataka

List of operational SEZs in Maharashtra

List of operational SEZs in Tamil Nadu

How to start operating in a SEZ?

Any individual, partnership firm, company or co-operative society can apply for setting up of Special Economic Zone. Special Economic Zones can be established jointly or separately by Central Governments, State Governments or any person for the purpose of manufacturing of goods or for rendering of services or for both or as a Free Trade and Warehousing Zone.

Procedures for obtaining SEZ approval

Procedures for the setting up a SEZ are provided under Section 3 of the Special Economic Zone Act, 2005.

The following are the procedures for the setting up a SEZ in India:

  1. Any person willing to set up an SEZ has to make a proposal to the State Government. The application for proposal for setting up of a SEZ is to be made in Form A as per SEZ Rules, 2006. The proposal can be made only after identifying the area for setting up of the SEZ. A proposal for setting up a SEZ can even be made directly before the Board.
  2. In case the proposal is made directly before the Board, the person, after getting approval, is required to obtain the concurrence of the State Government.
  3. On receipt of the proposal, the State Government needs to forward the same to the Board along with its recommendation.
  4. The Central Government has the right to prescribe various requirements for setting up a SEZ.

    Examples of some of the various requirements that can be prescribed by the Central Government are:

    • minimum area of land required for the setting up of a business
    • terms and conditions for various authorized operations
  5. Currently the minimum area requirement for setting up of SEZ is:


    Area requirement

    Multi sector SEZ

    1000 hectares

    Sector Specific SEZ

    100 hectares


    40 hectares

    IT/ITES/handicrafts SEZ Biotechnology/ non-conventional energy/gems and jewellery Sector

    10 hectares

  6. The Board, on receipt of the proposal, may either approve the proposal subject to such terms and conditions as it may deem fit or may even modify or reject the proposal.
  7. Final action of the Board on receipt of proposal:
  8. If everything goes well, the Central Government on receipt of the communication would issue a letter of approval on such terms and conditions and obligations and entitlements as may be approved by the Board, to the Developer, being the person or the State Government concerned.

Documents required to apply for setting up of Special Economic Zone

The bellow list indicated the required documentation that must be submitted in order to propose the establishment of a new SEZ. 

The bellow fact sheet shows the number of approvals granted to date and the number of notified SEZ in India.

Fact Sheet on Special Economic Zones (SEZ) in India as on December 31, 2021

Number of Formal Approvals


Number of Notified SEZs


Number of In-Principal Approvals


Operational SEZs

268 (Out of them, 25 are multi product SEZs, remaining are sector specific SEZs)

Units approved in SEZs


Total Investment

Central Government SEZs

INR 220.92 billion (USD 2.92 billion)

State/Pvt. SEZs set up before 2006

INR 136.29 billion (USD 1.8 billion)

SEZs Notified under the Act

INR 5928.45 billion (USD 78.27 billion)


INR 6285.66 billion (USD 82.99 billion)



INR 7966.69 billion (USD 105.03 billion)


INR 7595.24 billion (USD 100.14 billion)

(As on 30th November 2021)

INR 6103.01 billion (USD 82.34 billion)

Employment (No. of people)

Central Government SEZs


State/Private SEZs set up before 2006


SEZs Notified under the Act




Source: Ministry of Commerce & Industry, Department of Commerce, Government of India


The Canadian Trade Commissioner Service in India recommends that readers seek professional advice regarding their particular circumstances. This publication should not be relied on as a substitute for such professional advice. The Government of Canada does not guarantee the accuracy of any of the information contained on this page. Readers should independently verify the accuracy and reliability of the information.

Content on this page is provided by Dezan Shira & Associates a pan-Asia, multi-disciplinary professional services firm, providing legal, tax, and operational advisory to international corporate investors.

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