SEZ Framework Set for Major Overhaul
The Union Budget 2026 is expected to roll out far-reaching reforms in Special Economic Zones (SEZs) to revive investment, boost exports, and enable greater domestic sales. Policymakers are looking to modernise the SEZ framework, which industry stakeholders say has become outdated and misaligned with Bharat’s ambition to build $100 billion Global Capability Centres (GCCs).
Industry demands include 24×7 operational flexibility, 100% FDI through the automatic route, and extension of PLI benefits to hyperscale data centres, positioning SEZs as next-generation export and digital hubs.
Incentives to Crowd in Investment and Innovation
Proposed measures focus on strengthening investment economics within SEZs. These include profit-linked incentives, enhanced R&D tax credits of up to 200%, and a proposal to lower SARFAESI thresholds for NBFCs to ₹1 lakh, aimed at faster recoveries and improved asset quality.
The hospitality and tourism sector has also sought targeted incentives, including tourism-linked PLIs, to stimulate consumption and employment while supporting services exports.
Balancing Global Strategy and Fiscal Discipline
SEZ reforms are being calibrated against broader fiscal and geopolitical considerations. With rising defence capital expenditure and the fiscal deficit targeted in the 4.3–4.6% of GDP range, the government is seeking to balance national security priorities with long-term economic competitiveness.
MSMEs and startups operating within SEZs are expecting expanded credit guarantees, simplified compliance norms, and formalisation support, enabling them to integrate more effectively into global value chains.
