Summary
Exporters are no longer restricted to Special Economic Zones (SEZs) in India. FM Nirmala Sitharaman announced that they can now export from any location, streamlining operations and reducing compliance burdens for businesses.
Exporters Can Now Operate Outside SEZs: FM Sitharaman
In a major announcement aimed at liberalising trade and boosting India’s exports, Finance Minister Nirmala Sitharaman declared that exporters are no longer required to operate from SEZs (Special Economic Zones). They can now conduct export activities from any location within India.
This reform comes as part of the broader government effort to reduce compliance burden and make India a truly export-friendly economy.
What Did FM Sitharaman Say?
Speaking at an industry forum in June 2025, the Finance Minister clarified:
“Exporters today are not necessarily in an SEZ. You can be anywhere and still be an exporter.”
This marks a policy shift from the older model where exporters often had to set up shop in SEZs to avail tax and regulatory benefits.
Why This Matters for Exporters
Key Benefits:
- ✅ Freedom of Location: Operate from home, warehouse, or any office across India
- ✅ Lower Setup Costs: No need to lease space in expensive SEZ parks
- ✅ Simplified Compliance: Fewer SEZ-specific filings and rules
- ✅ Wider Market Reach: Easy to integrate with domestic supply chains
- ✅ Boost for Small Exporters: MSMEs and freelancers can export without moving
Legal and Policy Background
Earlier Position (Pre-2025)
- Exporters had to register under SEZ Act, 2005 or EOUs (Export Oriented Units) for key benefits
- Customs and GST compliance linked with SEZ location codes
- Infrastructure cost and location constraints were major hurdles
Current Position (Post-2025 Update)
- No SEZ registration required for availing basic export benefits
- Benefits available under:
- Foreign Trade Policy 2023 (Chapter 4 and 5)
- Section 16 of IGST Act, 2017 – Export is a zero-rated supply
- GST Refund mechanism remains intact even without SEZ tag
📖 [Source: Ministry of Finance announcement, June 2025]
📎 Read FTP 2023 at dgft.gov.in
Expert Tip: Use LUT for GST-Free Exports
Even if you’re outside an SEZ, you can export goods/services without paying GST upfront by filing a Letter of Undertaking (LUT) under Rule 96A of CGST Rules.
👉 Ideal for small exporters and IT service providers.
Comparison: SEZ vs Non-SEZ Exporters
| Feature | SEZ Exporter | Non-SEZ Exporter (Post-2025) |
|---|---|---|
| Location Restriction | Must be in SEZ zone | Can be anywhere in India |
| GST on Export | Zero-rated | Zero-rated with or without LUT |
| SEZ Compliance | Heavy (SOFTEX, BOA, etc.) | Simplified GST + Customs compliance |
| Infrastructure Costs | High (dedicated land/space) | Flexible (own premises/home) |
| Ideal for | Large firms | MSMEs, freelancers, D2C brands |
How to Start Exporting from Any Location
- Register on DGFT portal – Get IEC (Import Export Code)
- GST Registration – Mark yourself as an exporter
- Filing LUT (Optional) – To export without tax payment
- Use Indian Customs EDI (ICEGATE) – For shipping bill and refund
- Claim GST Refund – Under zero-rated supply
FAQs on Exporters Operating Outside SEZs
Q1. Can I export services from my home office?
Yes. There is no need to be in an SEZ to export services post-2025.
Q2. Do I still get GST refund if I’m not in an SEZ?
Yes. As long as your supply qualifies as export under Section 2(5) of IGST Act and meets conditions of Section 16.
Q3. Is LUT mandatory?
No, but highly recommended. Else, you’ll need to pay IGST and then claim a refund.
🔗 Related Efiletax Blogs
Final Words: Efiletax Can Help You Go Global
At Efiletax, we simplify GST, IEC, LUT filings, and export documentation — so you can focus on growing your international business. Whether you’re a D2C brand, IT consultant, or MSME exporter, our experts are here to support you.