In a bid to push domestic manufacturing and export of semiconductors and electronics, the Union ministry of commerce and industries has amended the SEZ rules, easing contiguous land area norms for special economic zones (SEZs) that want to engage exclusively in the manufacturing of semiconductors or electronic components.

“Where a special economic zone is exclusively set up for the manufacturing of semiconductors or electronic components, the contiguous land area shall be 10 hectares or more,” the commerce ministry’s notification said. Earlier, this was 50 hectares.

The notification further said that for the purposes of this provision, the electronic components would include display module sub-assembly, camera module sub-assembly, battery sub-assembly, various types of other module sub-assemblies, printed circuit board, lithium-ion cells for batteries, mobile and information technology hardware components, hearables and wearables.

The notification also said that the board of approval (the highest decision-making body for SEZs) can relax the condition of encumbrance-free area, in cases where the area is mortgaged or leased to the central or state government, or their authorised agency.

India Electronics and Semiconductor Association and SEMI, the organiser of Semicon events including Semicon India, said that these reforms will make it significantly easier for companies to establish facilities and scale up production in India’s high-tech manufacturing ecosystem.

“This will help the MSMEs and start-ups to flourish further and boost chip and electronics manufacturing, and also garner investor interest. By liberalising the policy and aligning it with the realities of land availability and global competitiveness, the government has reinforced India’s ambition to become a global electronics manufacturing destination,” said Ashok Chandak, president, IESA and SEMI India.

He added that these measures will particularly benefit the manufacturing of strategic components such as discrete semiconductors (transistors, diodes), integrated circuits, printed circuit boards, display and camera modules, battery packs and lithium-ion cells — core building blocks for devices ranging from smartphones and electric vehicles to data centres.

“This is a timely and strategic push that strengthens the ‘Design in India to Make in India’ mission, and it will help create new investment pipelines, generate employment and reduce dependence on imports,” said Chandak.