SEZ Meaning: What Is a Special Economic Zone?
Published on December 1, 2025
• 9 min read
India’s rapid industrial and export growth owes much to its network of Special Economic Zones (SEZs). In this blog, you’ll learn the complete SEZ meaning, what a Special Economic Zone (SEZ) is, how it operates, and why it plays a crucial role in India’s export-led growth.
We’ll explore the objectives and benefits of SEZs, the SEZ Act and Rules, and how different states implement their own SEZ policies. You’ll also discover the functions of Export Oriented Units (EOUs), major SEZs across India like Cochin, Kandla, and SEEPZ, and how modern logistics solutions like WareIQ enhance SEZ operations.
About Special Economic Zone (SEZ)
A Special Economic Zone (SEZ) is a designated area in India that promotes trade, investment, and exports through simplified regulations and attractive incentives. SEZs are designed to provide world-class infrastructure and a stable fiscal environment to boost economic activity.
India first explored the Export Processing Zone (EPZ) model in 1965 with the Kandla EPZ. Learning from its limitations, the government introduced the SEZ policy in April 2000 to attract larger domestic and foreign investments. Unlike regular industrial areas, SEZs offer tax benefits, relaxed regulations, and single-window clearances for faster approvals.
The SEZ Act, 2005, formalized this framework and came into effect in February 2006. It simplified procedures, clarified investor rights, and ensured support from both the state and central governments. The Act and SEZ Rules focus on key objectives: generating additional economic activity, promoting the export of goods and services, encouraging domestic and foreign investment, creating employment, and developing robust infrastructure.
SEZs in India
- Cochin Special Economic Zone (CSEZ)
- CSEZ has licensing authority for SEZ units and EOUs in Kerala, Karnataka, Lakshadweep, and Mahe.
- Has a sub-office in Bangalore to support EOUs in Karnataka.
- Known for having one of the best infrastructures among SEZs in India.
- The government invested ₹95 crore in infrastructure, including:
- 25 MVA 110/11 KV substation
- RMU-based power distribution system
- Integrated water and effluent treatment plants.
- Unique as the only SEZ in India distributing power within the zone.
Contact:
Development Commissioner,
CSEZ, Kakkanad,
Cochin – 682030
Tel: 91-484-2413222, 2413235, 2413111, 2413234
Fax: 91-484-2413074
E-mail: dc@csez.gov.in
- Falta Special Economic Zone (FSEZ)
- FSEZ was established in 1984 and brought under the SEZ Act, 2005, in 2006.
- Located 55 km from Kolkata, surrounded by a pollution-free environment.
- Well-connected through State highways, Kolkata and Haldia ports, and Dumdum International Airport.
- Exports and imports through this SEZ enjoy tax and duty exemptions under Rule 22 of the SEZ Rules.
Contact:
Development Commissioner
FSEZ, M.S.O Building, 4th Floor, Nizam Palace,
Kolkata-700020
Tel: 91-33-22472263, 22477923, 22404092
Fax: 91-33-22477923
Email: fepz@wb.nic.in
3. Kandla Special Economic Zone (KASEZ)
- KASEZ is India’s first SEZ (formerly EPZ), established in 1965 in Kutch, Gujarat.
- Covers over 1,000 acres and houses 300+ operational units.
- Strategically located near Deendayal Port and Mundra Port, offering direct access to trade routes.
- Host industries in textiles, pharmaceuticals, engineering, plastics, and chemicals.
- Key advantages:
- Customs duty and tax exemptions.
- Simplified procedures and 24×7 clearance.
- Ready access to utilities, warehousing, and banking services.
Contact:
Development Commissioner
Kandla Special Economic Zone
Dist. Kutch, Gandhidham (Gujarat), Pin: 370230 Tel: 91-2836-252273, 253300, 252475, 252281, 253711
Fax: 91-2836-252194, 252250
E-mail: dc.kasez-gj@gov.in
4. Madras Special Economic Zone (MEPZ)
- MEPZ was established in 1984 under the Ministry of Commerce.
- Supports SEZs in Tamil Nadu, Puducherry, and the Andaman and Nicobar Islands.
- Includes 52 operational SEZs: 8 ELCOT, 5 SIPCOT, 1 Central Government, and 38 private SEZs.
- Hosts industries across automotive, apparel, IT services, and pharmaceuticals.
- Plays a crucial role in boosting the region’s export-driven growth.
Contact:
Development Commissioner
MEPZ Special Economic Zone, National Highway 45,
Tambaram, Chennai-600045 MEPZ CHENNAI
Tel: 91-44-22628220, 22628230, 22628233
Fax: 91-44-2628218
Email: dc@mepz.gov.in
5. SEEPZ Special Economic Zone (Mumbai)
- The Santacruz Electronics Export Processing Zone (SEEPZ) was established on May 1, 1973, in Andheri (East), Mumbai, over an area of 110 acres leased from the Maharashtra Industrial Development Corporation (MIDC).
- Initially created as a uni-product zone for electronic goods, its main goals were to:
- Boost India’s electronics manufacturing capacity.
- Encourage technology transfer and foreign exchange earnings.
- In 1987–88, the Gems & Jewelry sector was added, transforming SEEPZ into one of India’s most dynamic export hubs.
- To simplify operations and attract foreign investment, the Government converted SEEPZ into a Special Economic Zone (SEZ) on November 1, 2000, under the SEZ policy.
Contact:
Development Commissioner,
SEEPZ, Andheri (East)Mumbai-400096
Tel: 91-22-28290856, 28291388, 28290046, 28292147, 28292144
Fax: 91-22-28291385, 22829175
E-mail: dc@seepz.com
Setting Up of SEZ
Any individual, company, partnership, or co-operative society can apply to set up a Special Economic Zone (SEZ) in India. The application is submitted in Form-A to the concerned State Government and the Board of Approval (BOA) under the Department of Commerce. The BOA considers the application only after receiving the State Government’s recommendation.
For most SEZs or Free Trade and Warehousing Zones (FTWZ), the minimum contiguous land area is 50 hectares. In certain states like Assam, Meghalaya, Nagaland, Arunachal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttarakhand, Sikkim, Goa, or Union Territories, the minimum is 25 hectares. SEZs for IT/ITES, biotech, or health services (excluding hospitals) have no minimum land requirement but must meet the minimum built-up area as per the SEZ (3rd Amendment) Rules, 2019.
Once the BOA grants approval and the Development Commissioner certifies land contiguity and availability, the area is officially notified as an SEZ.
[Download Form-A: Application for Setting Up of Special Economic Zone]SEZ Act and Rules
The Special Economic Zones (SEZ) Act, 2005, provides the legal framework for establishing, developing, and managing SEZs in India. Its main objective is to promote exports, attract investments, create jobs, and develop world-class infrastructure.
The Act simplifies procedures, offers single-window clearances, and defines the roles of developers, units, and government authorities in the SEZ ecosystem.
- The SEZ Act covers all aspects of SEZ operations, including approvals, land acquisition, infrastructure development, and fiscal incentives.
- It ensures a stable regulatory environment for investors by clarifying rights, duties, and obligations.
- SEZ units benefit from tax exemptions, relaxed labor laws, and streamlined administrative procedures under this Act.
Over time, amendments have been made to keep the Act in line with changing economic needs. The SEZ (Amendment) Act, 2019, introduced key updates, such as expanding the definition of eligible entities to include trusts and other notified organizations.
It also clarified that authorities, companies, trusts, or other entities may develop SEZs with proper approvals. This amendment replaced the 2019 Ordinance and ensured that actions taken under the Ordinance remain valid.
The SEZ Rules complement the Act by providing detailed guidelines on approvals, notifications, compliance, and reporting. They outline procedures for developers and units, including setting up infrastructure, meeting minimum area requirements, and obtaining clearances. The Rules also cover the benefits and obligations of SEZ units, including tax incentives, foreign investment procedures, and export obligations.
State SEZ Acts
Different states in India have their own SEZ laws that define the scope, infrastructure, and roles of authorities within the zone. Below is a summary of key definitions from select states:
| State | Definition (Key Highlights) | Download Full Act |
| Gujarat | Covers the whole state. Defines “amenities” like roads, power, water, sewerage, parks, markets, and other basic services. Explains the roles of Developers, Co-developers, and business units operating in the zone. | Download Gujarat SEZ Act |
| Haryana | SEZs include roads, power, water, parks, tourist spots, and social infrastructure. Defines responsibilities of units and operators providing services within the zone. | Download Haryana SEZ Act |
| Madhya Pradesh | Focuses on essential services, industrial, commercial, and social infrastructure. Clarifies the roles of Developers and business units. | Download MP SEZ Act |
| West Bengal | Covers the development, management, and regulation of industries and infrastructure within the SEZ. | Download West Bengal SEZ Act |
| Punjab | Promotes industrial townships with world-class infrastructure. Explains what counts as a unit and the services provided in the SEZ. | Download Punjab SEZ Act |
EOU Agenda
Export Oriented Units (EOUs) play a key role in boosting exports from Export Processing Zones and Special Economic Zones (SEZs). They focus on producing goods and services mainly for export and benefit from several SEZ benefits, including duty exemptions and easier procedures.
- The EOU Division handles policy formulation, data compilation, and coordination with SEZs.
- It also reviews proposals for industrial licenses and ensures timely redressal of grievances through other ministries.
- It manages reimbursements like Central Sales Tax (CST) and Duty Drawback (DBK), while addressing legal, audit, and parliamentary matters related to EOUs.
How WareIQ Can Support Logistics for SEZ-Based Exporters and Manufacturers
WareIQ is a Y-Combinator-backed eCommerce fulfillment and shipping platform that helps brands streamline multi-channel operations across D2C, marketplaces, quick commerce, and B2B trade.
With a Pan-India network of fulfillment centers across 12+ cities and last-mile delivery to over 27,000 pin codes, WareIQ enables fast, compliant, and cost-efficient logistics.
Its tech-driven Multi-Channel Fulfillment Platform seamlessly integrates with leading marketplaces such as Amazon, Flipkart, and Myntra, as well as D2C platforms such as Shopify, Magento, and WooCommerce, enabling businesses to manage orders, inventory, and shipments from a single dashboard.
Through Inventory LogIQ, WareIQ automates inventory planning, minimizes stockouts, and optimizes replenishment. Its tech-enabled returns QC solution ensures transparency and reduces marketplace claim rejections by capturing HD evidence of returned products.
As a marketplace-compliant alternative to FBA or FBF, WareIQ offers scalable capacity, Seller Flex and FAssured compliant warehouses, and advanced analytics to boost fulfillment efficiency. It also provides seller support services, including GST and APOB/PPOB registration and NDR verification.
WareIQ’s Smart Shipping solution further enhances delivery efficiency through a multi-carrier engine, automated workflows to reduce RTOs, and control tower visibility. With same- or next-day delivery options and custom-branded tracking, WareIQ helps brands deliver faster, reduce logistics costs, and improve customer satisfaction.
FAQs
What is the main purpose of establishing Special Economic Zones (SEZs) in India?
The primary goal of SEZs is to boost exports, attract foreign investment, create employment, and enhance industrial growth by offering tax incentives, simplified procedures, and world-class infrastructure.
How are SEZs different from Export Processing Zones (EPZs)?
EPZs were limited to export manufacturing, while SEZs are broader. It covers manufacturing, trade, and services, with better fiscal incentives, simpler customs rules, and greater autonomy for developers and investors.
Can eCommerce businesses operate within SEZs?
Yes. SEZs are increasingly attracting eCommerce and logistics players who use SEZ warehousing benefits to enable efficient cross-border trade, achieve tax savings, and streamline export fulfillment.
