SEZ Amendment Bill unlikely in Monsoon session as inter-ministerial consultation underway

The SEZ (Special Economic Zones) Amendment Bill is unlikely to be tabled in the ongoing Monsoon session of Parliament, as inter-ministerial consultations are still underway, government sources told CNBC-TV18.

The Department of Commerce will incorporate recommendations and suggestions from various ministries once this consultation process concludes. The bill aims to make SEZs more viable and ensure higher capacity utilisation, particularly for those currently operating at lower levels.

The proposed legislation is expected to allow domestic sales by SEZs after payment of applicable taxes to ensure no revenue loss for the state, while maintaining SEZs’ status as Net Foreign Exchange (NFE)-positive. Government sources clarified that only a portion of production would be permitted for diversion to the Domestic Tariff Area (DTA), and even that would be subject to rules linked to the overall turnover. They also projected significant potential investments in SEZs that could be unlocked once the amendments are implemented, with the government hopeful of offsetting current export headwinds through higher SEZ production.
India’s trade deficit in June 2025 narrowed to $3.51 billion compared to $7.30 billion in June 2024, while exports rose to $67.98 billion from $63.83 billion in the same period.

Last December, government sources had told CNBC-TV18 that the DESH (Development of Enterprise and Services Hub) Bill had been shelved, with most of its proposed amendments integrated into the SEZ Amendment Bill. At that time, sources indicated that the government planned to introduce changes to the Rules and Subordinate Legislation under the SEZ Act to address immediate concerns, as passing the Bill would likely take longer.

Investor interest in SEZs had declined following the removal of direct tax incentives, prompting the government to consider offering sops to companies investing in SEZs to make the proposition more attractive.

Discussions on the DESH Bill in 2022 involved the Ministry of Commerce & Industry and the Revenue Department working to resolve tax-related issues. These discussions also included proposals to drop corporate tax concessions in the draft bill. Earlier, the Union Finance Ministry had objected to extending the 15% corporate tax rate until 2032. While both ministries considered changes to the DESH Bill aimed at boosting exports, the Commerce Ministry had pushed to exempt SEZs from NFE evaluation criteria, a move opposed by both the Finance Ministry and NITI Aayog.