India lines up its biggest SEZ overhaul in two decades, with a nudge toward selling into the home market

The Centre is preparing the most sweeping revamp of India's Special Economic Zone framework since the SEZ Act took effect in 2005, according to industry and policy experts cited in a Business Standard report on Monday. The proposed changes, informally dubbed SEZ 2.0, include easier access to the domestic market, more flexible operating rules, revised net-foreign-exchange conditions and closer alignment with global supply chains. The 2026-27 Union Budget already introduced a one-time measure letting eligible SEZ manufacturing units sell into the domestic tariff area at concessional duties tied to export performance.

The original regime built major export hubs in IT, pharma and electronics, but many approved zones stayed underused after tax breaks such as MAT and dividend-distribution relief were withdrawn and headline income-tax benefits expired. A rival route, the Manufacture and Other Operations in Warehouse (MOOWR) scheme, drew occupiers with duty deferral and unrestricted domestic sales, pulling demand away from SEZs.

Why it matters for Maharashtra property: a large share of Grade-A office stock in the Mumbai region, Pune and other metros sits inside SEZ-notified IT parks. Rules that let tenants serve the domestic market more freely could improve occupancy and revive leasing in campuses that had emptied as export-only conditions bit. That, in turn, feeds commercial rents, REIT-owned portfolios and the office demand that underpins housing in surrounding suburbs.

This is a reform under discussion, not settled law; experts differ on scope and timing, and the eventual framework will decide how much actually changes on the ground. For now it signals policy intent to make SEZ real estate more usable, which is the variable to watch for MMR's office corridors.