Finraja

How to Establish a Unit in SEZ in India: Central & State Guide 2025

How to Establish a Unit in SEZ in India (2025 Guide for Central & State)

India’s export-driven growth has been powered by Special Economic Zones (SEZs), which offer businesses tax incentives, regulatory exemptions, and global trade opportunities. Governed by the Special Economic Zones Act, 2005, SEZs are a central government initiative, but state governments also play an active role in land allocation, infrastructure, and approvals.

If you are planning to expand globally, understanding how to establish a unit in SEZ in India is essential. This article provides a central + state perspective covering the SEZ registration process, eligibility, minimum area requirement, list of major SEZs, and consultancy support for smooth setup.

What is a Special Economic Zone (SEZ)?

A Special Economic Zone is a designated geographical area treated as a foreign territory for trade operations, duties, and tariffs. Businesses in SEZs enjoy special laws different from the rest of India’s economy.

  • Central role: The Government of India sets the policy, tax incentives, and regulatory framework.
  • State role: States provide land, utilities, local clearances, and infrastructure for SEZs.

This dual approach ensures both national-level incentives and state-level execution support.

Benefits of Establishing a Unit in SEZ

Businesses setting up in SEZs enjoy:

  • Tax incentives – exemptions on customs duties, excise duties, and income tax holidays.
  • Simplified compliance – single-window clearance & faster approvals.
  • 100% FDI allowance – liberalized rules for foreign investment.
  • Repatriation of profits – no restrictions on export earnings.
  • Infrastructure access – world-class facilities, logistics hubs, and connectivity.
  • Employment generation & global exposure – strong workforce support and access to global buyers.

Minimum Area Requirement for SEZ in India

The minimum area requirement varies by type of SEZ:

  • Multi-product SEZ: 1,000 hectares.
  • Sector-specific SEZ: 100 hectares.
  • IT/ITES SEZ: Based on built-up area (e.g., 100,000 sq. m. in major cities).
  • Relaxations: Smaller states and North-Eastern states enjoy reduced requirements.

This flexibility allows both large corporates and SMEs/startups to participate in SEZ opportunities.

Procedure for Setting Up a Unit in SEZ

  1. Submitting Form-F with Documents

Key documents include:

  • Certificate of Incorporation
  • Memorandum & Articles of Association
  • Project report & Board resolution
  • PAN, IEC, audited financials
  • Lease agreement or incubation premises details
  1. Rectification of Deficiencies

If discrepancies arise, the DC may request additional information.

  1. Approval & Payment of Registration Fee

Once approved, registration fees are paid through NSDL.

  1. Lease Deed Submission

A formal lease agreement with the SEZ developer must be signed and submitted.

  1. Commencement Intimation

The unit must notify the DC about the date of commencement of production.

List of Special Economic Zones in India

India has 270+ operational SEZs across multiple states. Some major ones include:

  • SEEPZ SEZ (Maharashtra) – Gems & Jewellery
  • Noida SEZ (Uttar Pradesh) – Electronics & IT
  • Mundra SEZ (Gujarat) – Multi-product hub
  • Visakhapatnam SEZ (Andhra Pradesh) – Pharma & IT
  • Chennai SEZ (Tamil Nadu) – Automobiles & IT
  • Falcon SEZ, Surat (Gujarat) – Textiles & Diamonds

Both central government approvals and state-level execution make these zones successful.

Role of SEZ Consultants in India

Navigating the SEZ process requires expertise. SEZ Consultants in India assist businesses with:

  • Preparing SEZ application & documentation.
  • Compliance with SEZ Rules, 2006.
  • Tax & incentive advisory.
  • Liaison with central & state authorities.
  • Drafting lease agreements & project reports.

Engaging with a professional SEZ setup consultancy reduces delays and ensures approvals are obtained smoothly.

Central vs State Role in SEZ Establishment

  • Central Government (Policy Maker):
    • Enacts SEZ Act, 2005 & SEZ Rules, 2006.
    • Provides tax incentives, customs duty exemptions, and foreign trade policies.
    • Approves SEZs through the Board of Approval (BoA).
  • State Governments (Facilitators):
    • Allocate land for SEZs.
    • Provide infrastructure: roads, power, water, and connectivity.
    • Grant local permits & operational clearances.
    • Promote SEZ investments through state-level industrial policies.

This combined effort ensures ease of doing business and balanced development across states.

Challenges in Setting Up an SEZ Unit

  • Lengthy approval timelines.
  • Complex documentation.
  • Choosing the right SEZ based on sector & location.
  • Navigating dual compliance (central + state).

Partnering with SEZ consultants in India ensures that businesses handle compliance, legalities, and approvals effectively.

Conclusion

Establishing a unit in SEZ is one of the most effective strategies to enter global trade while enjoying tax and regulatory benefits. By following the step-by-step SEZ registration process and understanding both central & state roles, businesses can leverage SEZs for faster growth.

For smooth setup, engaging with SEZ consultants or SEZ setup consultancy services in India can help businesses avoid errors, save time, and maximize incentives.

2025 is the right time to explore SEZ opportunities and expand your business globally.

 

Share post:

Leave a Reply

Registration Form

Fill out the form below, and we will be in touch shortly.

Registration Form

Fill out the form below, and we will be in touch shortly.