To help exporters access the local market, the Commerce Ministry, NITI Aayog, and industry leaders are looking into changes to SEZ policies.
A high-level group of people from the Commerce and Industry Ministry, NITI Aayog, and leading businesses is creating a new plan for India’s Special Economic Zones (SEZs), which shows how quickly the government is reacting to economic issues and changing business environment.
This is happening because many export businesses, especially those that sell to the United States, are faced with high tariffs from Washington, which have made them less competitive on price front. The government is trying to find ways for manufacturers in SEZs to sell more in India, while still protecting local businesses.
Special Economic Zones have been very important for India’s export-driven economic growth. In the fiscal year 2025, India’s SEZ exports were worth $172 billion, coming from about 276 businesses across the country. Local sales only made up about 2% of the total production.
The US government raised tariffs in August 2025, from about 3.17% to as high as 50% for some goods. This has really impacted exports and made it harder for Indian companies to compete, especially in areas like gems and jewelry. Exports in this sector dropped by 11.72% to $28.5 billion in the fiscal year 2025, and nearly 65% of India’s jewelry exports come from SEZ units.
According to a senior official, the new plan will try to find a balance between helping exports and making sure local manufacturers have a fair chance. One idea being considered is the reverse job work model, which would allow SEZ units to take on manufacturing contracts from local businesses if export orders slow down. This would help keep production going and protect jobs.
What’s different now is how quickly and easily the government is fixing policies. This is in line with the government’s policy of constant monitoring and fixing of the problems arising from complex economic scenarios. The related ministries and departments have been closely watching global trade issues and responding quickly to what’s happening. Instead of changing the SEZ Bill through a long legal process, the government is looking at faster administrative ways to make and implement changes quickly.
An official said that this kind of quick, fact-based decision-making is very different from the slower policy changes of the past. The government knows that international trade is changing a lot right now, and local industries need help with policies right away. The focus is on doing things quickly to keep businesses running, protect jobs, and keep supply chains strong.
The gems and jewelry sector is one of the strongest supporters of SEZ changes. The Gem and Jewellery Export Promotion Council (GJEPC) has asked for policies that would allow SEZ units to do reverse job work and sell in local tariff areas (DTA). They also want longer export periods and a break on interest payments for loans, as they are facing growing financial problems.
Since the US is still the biggest market for Indian gems and jewellery exports, the recently imposed tariffs are a big problem for about $10 billion worth of exports and about 5 million jobs, mostly in manufacturing centres like Surat, Mumbai, and Jaipur. These actions are designed to keep factories and workers busy, protect jobs, and support competition during this difficult time.
Besides the immediate problems with tariffs, India’s SEZ system has some ongoing issues. SEZ units don’t invest much in Research and Development (R&D). A recent study found that only 4 out of 14 gems and jewelry SEZ units spent money on R&D. There’s also a lack of training programs, skill development, and use of new technology. Foreign Direct Investment (FDI), which is important for bringing in technology and building brands, is still low because there aren’t enough investor protection agreements and people don’t have a good view of Indian SEZs.
The government is focused on using administrative and notification-based methods instead of long legal processes, which shows they are dedicated to acting quickly to help exporters and keep manufacturing stable.
As exporters deal with an uncertain global situation, the government’s plan to adjust SEZ rules shows a way of thinking about policies that are ready for the future and can adapt to changes. Things that used to take months of discussion are now being handled with quick action, which will help Indian exporters stay competitive and strong. By matching manufacturing incentives with the changing realities of international trade, the government is showing a commitment to protecting jobs, increasing production, and turning problems into opportunities for local growth.
