India’s decision to allow Special Economic Zone (SEZ) units to sell goods domestically at concessional duty rates is expected to provide much-needed relief to exporters grappling with weak global demand, industry bodies and officials said.
The measure, notified by the Central Board of Indirect Taxes and Customs, will remain in effect from April 1, 2026 to March 31, 2027, enabling SEZ units to clear goods into the Domestic Tariff Area (DTA) at reduced customs duties.
The Apparel Export Promotion Council (AEPC) welcomed the move, calling it a timely intervention for the apparel sector.
“This initiative will significantly ease cost pressures and improve liquidity for exporters at a time when global demand remains uncertain,” an AEPC spokesperson said. “It will also help ensure production continuity and better inventory management across the apparel value chain.”
Industry executives echoed similar views, noting that the relaxation would allow companies to redirect surplus export-oriented production into the domestic market.
“SEZ units have been operating below optimal capacity due to a slowdown in overseas orders. This measure provides flexibility to utilise that capacity and maintain steady operations,” said a senior executive at a leading garment exporting firm.
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Government officials said the policy is designed as a temporary support mechanism rather than a structural shift in SEZ rules.
“The concessional duty framework is a one-time measure to address current global trade challenges while preserving the export-oriented character of SEZs,” a senior government official said.
Analysts added that the move could also support import substitution by enabling competitively priced domestic supply from SEZ manufacturers, particularly in sectors such as textiles, chemicals and engineering goods.
“This is a pragmatic step that balances immediate industry needs with long-term policy discipline,” said a trade policy expert. “It allows exporters to stabilise cash flows without diluting the core objective of SEZs.”
The decision comes amid persistent global trade disruptions, rising logistics costs and geopolitical tensions, which have weighed on export-driven sectors and prompted policymakers to explore targeted relief measures.
While time-bound, the initiative is expected to help sustain industrial activity, protect jobs and improve resilience in India’s export ecosystem during a period of heightened uncertainty.
