India permits SEZ units to sell domestically at reduced customs duty through March 31, 2027
Change
India permitted Special Economic Zone manufacturing units to sell a capped share of goods into the domestic tariff area at reduced Basic Customs Duty and, in some cases, lower Agriculture Infrastructure and Development Cess from April 1, 2026, to March 31, 2027, provided the goods have at least 20% value addition.
Why it matters
SEZ manufacturers must now demonstrate minimum local value addition and operate within capped domestic-sale quotas, creating new documentation and compliance steps to access concessional treatment. Units in Free Trade Warehousing Zones are excluded from this temporary outlet, limiting options for those operators.
Implications
- • Special Economic Zone manufacturing units' compliance and customs teams must verify and document at least 20% manufacturing value addition before claiming concessional domestic-duty treatment.
- • Special Economic Zone manufacturing units' commercial teams must track and restrict the share of production sold into the domestic tariff area to remain within the notification's caps.
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