India’s one-time customs duty relief for SEZ units shows limited impact, with a majority of domestic supplies unlikely to benefit under the new policy framework.Around 81 percent of supplies from Special Economic Zones to the domestic market will not qualify for customs duty concessions under the government’s one-time relief scheme.

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• Out of total domestic supplies worth 30.64 billion dollars, goods valued at nearly 24.95 billion dollars will remain outside the scope of duty benefits.
• Only a small portion, nearly 13 percent of SEZ supplies, will receive a marginal duty reduction of about one percent, limiting the scheme’s overall effectiveness.
• Industry bodies have raised concerns over lack of clarity in calculation methods and classification, which has reduced interest among companies in availing the relief.
• The scheme allows SEZ units to sell goods in the domestic market at lower duty rates for one year, from April 2026 to March 2027.
• Eligibility conditions include production starting before March 31, 2025, minimum 20 percent value addition, and domestic sales capped at 30 percent of past export performance.
• Industry stakeholders are demanding extension of the relief period to at least three years to ensure meaningful benefits and better participation.
• Experts believe the limited duty cuts and strict conditions may prevent SEZ units from effectively competing with imports under free trade agreements.