Partial Cancellation of SEZs: Tata Steel, Infosys, ELCOT & SIPCOT Seek Government Nod

According to news reports, 4 prominent SEZ developers—Tata Steel, Infosys, Electronics Corporation of Tamil Nadu (ELCOT), and State Industries Promotion Corporation of Tamil Nadu (SIPCOT)—have submitted proposals to the government seeking partial cancellation of their respective Special Economic Zones (SEZs). These applications will be considered by the Board of Approval (BoA) in its upcoming meeting scheduled for May 9, chaired by Commerce Secretary Sunil Barthwal.

Special Economic Zones are designated enclaves considered foreign territory for trade and customs purposes. They offer tax incentives and simplified procedures to boost exports and attract investment. As of March 2024, 416 SEZs have been approved by the Indian government, with 276 operational and 6,279 units approved till the end of the financial year.

Tata Steel Seeks to Partially Surrender Gopalpur SEZ Land

Tata Steel SEZ Ltd, formerly known as Gopalpur SEZ Ltd, has requested the partial de-notification of 282.73 hectares from its total 588.65 hectares multi-product SEZ in Gopalpur, Odisha. The Development Commissioner of Falta SEZ, which oversees the jurisdiction, has recommended the proposal.

The company has already seen significant investments entering the domestic tariff area (DTA) surrounding the SEZ, which may have prompted the move to reallocate the land more effectively. The partial surrender is aimed at better aligning land use with current industrial and infrastructure development priorities. 

Read More: Tata Motors Share Price Fell ~2% Ahead of Demerger Vote Meeting. 

Infosys Cites Development Uncertainty in Indore SEZ

Infosys Ltd has proposed the partial de-notification of 20.23 hectares from its 52.64 hectares IT/ITES SEZ located in Indore, Madhya Pradesh. According to its submission, the company has completed Phase 1 of the development project but is encountering uncertainty with respect to Phases 2 and 3.

In its request, Infosys expressed its intention to optimise the use of allocated land and facilitate the creation of a more inclusive IT ecosystem by opening the unused area to other potential companies. The move reflects a shift towards land efficiency and adaptive planning in response to evolving operational realities.

ELCOT and SIPCOT Also Seek Land Reductions

The other 2 applications come from Tamil Nadu. ELCOT has sought approval to surrender 2.4 hectares of land from its 80.88 hectares IT/ITES SEZ located in Tirunelveli. Similarly, SIPCOT has applied for a partial cancellation, though the specific land area involved has not been detailed in the public domain.

These requests are part of a broader trend observed across multiple state and central SEZ developments, where developers are reassessing land usage amidst changing economic dynamics, policy shifts, and the evolving landscape of industry requirements.

SEZ Performance Remains Robust Despite Proposed Reductions

Despite these proposed cancellations, SEZs have shown a resilient performance. According to official data, exports from SEZs rose by over 8% to $143.34 billion between April 2024 and January 2025. SEZs contributed to more than one-third of India’s total outbound trade in the last financial year.

The partial cancellations do not reflect a decline in SEZ efficacy but rather a move towards rationalisation and resource optimisation. These land reallocation efforts may enable better integration with domestic economic zones or support more targeted infrastructure planning.

Conclusion

As India’s economic priorities evolve, the SEZ framework is undergoing gradual transformation. The current wave of partial de-notification requests underscores a more strategic and flexible approach to land utilisation by developers. The upcoming BoA meeting will provide further clarity on how the government balances export promotion with efficient land and infrastructure usage across SEZs.

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