- India had 368 notified and 277 operational SEZs at 31 March 2026, with 7,013 approved units.
- SEZ exports in FY 2025-26 were ₹16,36,192 crore (US$185.28 billion).
- The section 10AA tax holiday is closed to units that began operations after 30 June 2020.
- The proposed DESH Bill, meant to replace the SEZ Act, has not been enacted.
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How does an SEZ work in 2026?
Think of it as a fenced-off export zone. An SEZ developer builds and runs the zone, and individual businesses set up “units” inside it after approval.
Supplies from the rest of India into the zone count as exports. Sales from the zone back into the domestic tariff area (DTA) count as imports and attract duty. Inside, cheap. Outside, taxed.
Here is where things stand, from the SEZ India fact sheet as on 31 March 2026.
| Measure | 31 March 2026 |
|---|---|
| Formal approvals | 418 |
| Notified SEZs | 368 |
| Operational SEZs | 277 |
| Approved units | 7,013 |
| Employment | 32,61,147 people |
Two recent changes matter. In June 2025, the SEZ Rules cut the minimum land for semiconductor and electronic-component SEZs from 50 ha to 10 ha. Budget 2026-27 then announced a one-time window for eligible manufacturing units to sell part of their output in the DTA at concessional duty.
Is an SEZ still worth it for a services company?
Less than it was. Many Indian IT and back-office firms chose SEZs for the section 10AA income-tax holiday, and new units no longer get it.
What remains is mostly indirect tax and customs. Duty-free imports of equipment, zero-rated GST on inputs and services, and simpler export paperwork. Useful, yes. But those perks help a hardware-heavy unit far more than they help a 40-person software team.
So run the numbers against corporate tax in India at the normal rate. The SEZ’s real cost is rent in a notified campus and the compliance that comes with a unit approval. Many services firms now pick an STPI unit or a plain office instead.
Can you use an SEZ without your own entity?
No, not as a unit. Only an Indian entity can hold an SEZ unit approval, so you’d need your own company or a captive Global Capability Center.
An EOR team can still sit in an SEZ campus if the space is arranged lawfully, but the tax and customs perks belong to whoever holds the unit approval. If you want office space without that complexity, our post on office space solutions for satellite offices sets out simpler options.
How does Remunance help you decide on an SEZ?
Remunance coordinates workspace for your EOR team and runs payroll and statutory filings from our Pune entity, so you can test India before any SEZ commitment. When the business case for a unit is clear, our subsidiary formation team can set up the entity that applies. We have hired 1,200+ employees across 34 Indian cities. To weigh an SEZ against simpler set-ups, get a location and cost review.
What else do people ask about SEZ meaning?
What is the full form of SEZ?
SEZ stands for Special Economic Zone. In India, SEZs are notified under the Special Economic Zones Act, 2005 and the SEZ Rules, 2006.
Do SEZ units still get income-tax exemption?
Only units that started operations by 30 June 2020 can still claim the section 10AA deduction for its remaining years. New units get no income-tax holiday.
Is GST charged on supplies to an SEZ?
No, if the supply is for authorised operations. It is a zero-rated supply under section 16 of the IGST Act, made under LUT or with a refund claim.
Planning a hire in India?
Our founding team has run payroll and hiring in India for 22+ years, first as Remunance Systems, which was later acquired by ADP.