India Grants Temporary Customs Duty Relief On SEZ Goods Sold Domestically

The government temporarily reduced customs duty rates on goods manufactured in special economic zones and sold in the domestic tariff area (DTA) amid trade disruptions in the Persian Gulf region due to the Iran war.

The concessional customs duty rates will range between 5% and 12. 5%, significantly lower than the standard applicable rates, according to a gazette notification issued late Tuesday.

The relief will be in force for one year, effective from April 1, 2026, through March 31, 2027. However, the benefit will be available only to SEZ units that commenced commercial production on or before March 31, 2025.

Units that began operations after this cut-off date will not be eligible for the reduced duty structure.

The move is aimed at providing interim relief to eligible SEZ manufacturers and improving their competitiveness in the domestic market, while maintaining a time-bound approach to fiscal support.

Special economic zones are areas within a country that offer incentives to business and trade regulations operating in those areas.

The main objectives of the SEZ are generating additional economic activity, promoting exports of goods and services from the country, promoting foreign and domestic investment and creating more employment opportunities beside the development of infrastructure facilities.

As of December 2025, there are approximately 280 operating SEZs in India, with over 375 officially notified across the country.