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The Indian government is working on new Special Economic Zone (SEZ) norms aimed at reviving manufacturing and helping exporters cope with steep US tariffs that have disrupted export competitiveness. 
 
Need of New SEZ Norms for Exporters
 
1. Reverse Job Work Policy

• SEZ units will be allowed to undertake work for the domestic market, addressing underutilization of labor and equipment during seasonal export demand fluctuations.
• This policy helps optimize operational efficiency and makes SEZ units more viable amid export market uncertainties.

2. Boosting Manufacturing and Competitiveness

• The norms aim to revive manufacturing capabilities in SEZs that have been hit by tariff pressures.
• They seek to reduce dependence on uncertain overseas markets by integrating SEZ production with domestic demand.

3. Enhancing Export Competitiveness

• By allowing partial access to the domestic market and easing restrictions, SEZ units can sustain business despite adverse international tariffs, particularly from the US.
• Exporters are enabled to hold on to key markets while cutting losses.

4. Facilitating Investments and Innovation

• New norms encourage foreign direct investments (FDI) and technology adoption to match global SEZ standards seen in countries like China and Vietnam.
• There's a focus on promoting sectors such as semiconductor manufacturing within SEZs.

5. Simplification and Flexibility

• Land use norms have been relaxed (e.g., up to 25% land can be used for non-processing activities).
• Streamlined approval and compliance processes through single-window interfaces for faster functioning.

6. Strategic Alignment with National Missions

• New SEZ rules support initiatives like ‘Make in India’ and chip self-reliance missions by prioritizing semiconductor and electronic component manufacturing.

Objectives

• Optimize utilization of SEZ infrastructure and labor.
• Enable better domestic market access for exports-oriented units.
• Enhance global competitiveness of Indian SEZs.
• Attract investments including FDI and R&D.
• Provide an enabling environment for evolving industries.
• Strengthen contribution of SEZs to economic growth and export revenues.

These new norms reflect a strategic shift to make SEZs adaptive to global trade challenges and domestic economic priorities, ensuring sustainable growth for exporters and manufacturers in India.​

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