India Approves Micron and Aequs SEZ Projects to Boost Semiconductor Sector
| 2025-06-10
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India approves semiconductor and electronics SEZ proposals from Micron and Aequs, easing land and trade rules to strengthen high-tech manufacturing.
India Backs Rs 13,100-Crore Projects in Semiconductor and Electronics Manufacturing
India has approved two major special economic zone (SEZ) proposals from Micron Semiconductor Technology and Aequs Group, signalling a fresh push to strengthen the country’s electronics and semiconductor manufacturing capacity. The decision is backed by revised regulations aimed at reducing entry barriers and attracting high-value investments.
Micron’s SEZ will be located in Sanand, Gujarat, and will involve an estimated investment of ₹13,000 crore over 37.64 hectares. Aequs Group, through its Hubballi Durable Goods Cluster Pvt Ltd, will set up an SEZ in Dharwad, Karnataka, spanning 11.55 hectares and investing around ₹100 crore to produce electronic components.
Reforms to Attract High-Tech Manufacturing
The Ministry of Commerce and Industry announced that the approvals followed recent amendments to India’s SEZ Rules designed to ease restrictions in the semiconductor and electronics sector, which is characterised by high capital intensity, long gestation periods, and significant import dependencies.
A key change includes a reduction in the minimum land requirement for semiconductor or electronics SEZs from 50 hectares to just 10 hectares. This shift is aimed at making it easier for technology companies to establish manufacturing bases, especially in land-constrained locations.
In a statement, the ministry said: “These amendments are intended to promote pioneering investments and enable the growth of high-tech manufacturing industries in India.”
Boost to Domestic Supply and Trade Flexibility
Under the new rules, SEZ units in the semiconductor and electronic component sectors will be allowed to supply goods to the domestic market after paying applicable duties. This is a significant departure from earlier restrictions which limited domestic sales from SEZs.
Additionally, the changes will include goods received or supplied free of cost in the calculation of Net Foreign Exchange (NFE), potentially improving compliance mechanisms and financial incentives for manufacturers.
Rule 7 of the SEZ Rules has also been amended to permit SEZ land to be mortgaged or leased to government entities, even if the land is not encumbrance-free. This measure is expected to reduce procedural delays in acquiring land for high-value projects.
Strategic Importance and Broader Goals
The approvals come amid India's efforts to position itself as a global hub for electronics and semiconductor manufacturing. The government has identified the sector as crucial for national security, technological sovereignty, and reducing dependence on imports, particularly in the wake of global supply chain disruptions.
The Sanand site, where Micron will establish its plant, is already emerging as a key electronics manufacturing corridor in western India, with improved connectivity and access to skilled labour. Aequs’ Dharwad facility, located in Karnataka’s industrial belt, is expected to contribute to the development of a regional cluster for electronic components.
“The changes in SEZ regulations, including more flexible land requirements and domestic supply permissions, will help attract anchor investors and strengthen India’s role in the global value chain,” a senior government official familiar with the decision told the BBC.
Context: India’s Semiconductor Push
India has been actively courting global semiconductor firms as part of its broader “Make in India” and “Digital India” initiatives. The country announced a semiconductor incentive scheme in 2021, offering billions of dollars in subsidies to encourage chip fabrication, design, and packaging.
The approval of Micron’s and Aequs’ projects follows earlier investments by multinational firms and comes at a time when several governments are prioritising domestic chip manufacturing to ensure supply chain resilience.
As India aims to become a critical player in next-generation electronics production, easing SEZ norms marks a strategic policy pivot to align regulatory infrastructure with global investor expectations.
With the implementation of these reforms and the commencement of construction on approved sites, India’s semiconductor roadmap appears set for rapid acceleration.
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