The government has notified conditional concessional customs duty on clearance of goods manufactured in Special Economic Zones (SEZs) to the Domestic Tariff Area (DTA) to boost manufacturing capacity and improve competitiveness. The notification, issued under Section 25(1) of the Customs Act, 1962 as Notification No. 11/2026-Customs dated March 31, 2026, will be effective from April 1, 2026 to March 31, 2027. The measure is intended to address challenges faced by exporters after import treatment of SEZ clearances under Section 30 of the Special Economic Zones Act, 2005. The concession is expected to benefit around 1,200 SEZ manufacturing units by enabling economies of scale, reducing costs and enhancing resilience while preserving the export oriented nature of SEZs. Eligible units will be able to clear goods to the DTA at concessional duty rates subject to prescribed limits and conditions. Export benefits such as duty drawback on inputs will not be permitted for these clearances to prevent double advantages. Key eligibility conditions require a minimum 20 per cent value addition within the SEZ calculated using a defined formula based on assessable value and input costs and a cap equal to 30 per cent of the highest annual Free on Board (FOB) export value achieved in any of the three immediately preceding financial years. Units must furnish a Development Commissioner’s certificate confirming compliance together with a declaration to pay full duty in case of non fulfilment. Units will be subject to audit under SEZ Rules, 2006, and the concessions apply to units that commenced production on or before March 31, 2025. The framework excludes Free Trade Warehousing Zone units and goods imported into SEZs and cleared to the DTA without adequate manufacturing. The concessional framework covers a broad range of manufacturing sectors including mineral and chemical products, plastics, leather and textile articles, base metals and machinery as well as medical and optical instruments and miscellaneous manufactured articles. Certain sectors such as agriculture including marine and processed food products, tobacco, marble and granite, gems and jewellery, vehicles, toys and petroleum are excluded. In specified cases the notification provides partial exemption from Agriculture Infrastructure and Development Cess.