Andhra Pradesh to Host New Semiconductor Manufacturing SEZ in Vishakhapatnam

The Union Ministry of Commerce and Industry has notified a 12.14-hectare Special Economic Zone (SEZ) for semiconductor manufacturing in Visakhapatnam (also known as Vizag), Andhra Pradesh. The notification, S.O. 6148(E), was issued on 10 November 2026. It grants formal SEZ status to a proposed project by Advanced System In Package Technologies Private Limited (ASIP), an Indian company specialising in semiconductor packaging and testing.

The notification also sets up an approval committee to oversee the zone. In addition, it designates the SEZ as an Inland Container Depot (ICD) under the Customs Act, 1962.

India notifies new semiconductor manufacturing SEZ

ASIP proposed the semiconductor manufacturing SEZ under Section 3 of the SEZ Act, 2005. The proposed site covers Tarluwada and Gidizala villages in Anandapuram, Visakhapatnam district.

After examining the proposal, the central government confirmed that it met the requirements under Section 3(8) of the SEZ Act and other applicable conditions. It granted the developer a Letter of Approval (LoA) on 19 October 2026 under Section 3(10) of the Act.

The land was subsequently notified as an SEZ under Section 4(1) of the SEZ Act, read with Rule 8 of the SEZ Rules, 2006.

Village	Survey number	LPM number	Notified area
Tarluwada	1P	3552	11.26 hectares
Gidizala	378	7507	0.877 hectares
Total			12.14 hectares

Vizag Semiconductor SEZ designated as an ICD

Invoking Section 53(2) of the SEZ Act, the central government has specified 10 November 2026 as the effective date from which the zone will be deemed an ICD under Section 7 of the Customs Act.

An ICD provides an inland customs facility for handling import and export cargo. This designation establishes the zone’s customs status and provides a statutory basis for handling cargo at the notified location.

The arrangement is relevant to semiconductor manufacturing operations that may involve importing production inputs, equipment and components and exporting finished products. However, the notification does not introduce specific customs duty exemptions, concessions or simplified procedures for businesses operating within the SEZ. Companies must assess the applicable customs treatment under the relevant legislation and notifications rather than assume that ICD status automatically provides additional fiscal benefits.

Approval committee to oversee Vizag semiconductor SEZ operations

For the designated SEZ, an approval committee under Section 13(1) of the SEZ Act, 2005, has been constituted, which will perform functions prescribed under Section 14.

The committee comprises representatives from central and state government departments and regulatory authorities:

• Chairperson: Development Commissioner of the SEZ.
• Department of Commerce: A Director or Deputy Secretary from the Ministry of Commerce and Industry, or an eligible nominee.
• Foreign trade: The Zonal Joint Director General of Foreign Trade with jurisdiction over the SEZ.
• Customs and excise: The jurisdictional Commissioner of Customs or Central Excise, or an eligible nominee.
• Income tax: The jurisdictional Commissioner of Income Tax, or an eligible nominee.
• Banking: The Director (Banking), Banking Division, Ministry of Finance.
• State government: Two nominated officers, each not below the rank of Joint Secretary.
• SEZ developer: A representative of the developer as a special invitee.

The committee will provide the statutory mechanism for considering applications and overseeing activities within the SEZ. Its composition also facilitates coordination among authorities responsible for customs, taxation, foreign trade, banking and SEZ administration.

Business implications for semiconductor manufacturers and investors

The notification establishes the regulatory and administrative framework for developing the semiconductor manufacturing SEZ. For businesses evaluating the location, three aspects warrant attention:

1. Customs and logistics: The ICD designation provides a recognised customs framework for handling import and export cargo at the notified location. Chip manufacturers and suppliers can assess its relevance to the movement of production inputs, equipment and finished goods, subject to applicable customs procedures.
2. Regulatory coordination: The approval committee brings together representatives from relevant central and state government departments. This creates an institutional mechanism for addressing regulatory and administrative matters concerning the SEZ and its units.
3. Project development and investment: The notification identifies the land allocated to the proposed zone and formalises its SEZ status.

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How to set up an SEZ in India: approval process and land requirements

Businesses planning to establish an SEZ in India must follow the approval process prescribed under the SEZ regulatory framework. The process involves submitting an application to the relevant authorities, meeting the applicable land requirements and obtaining government approval.

Application and approval process

An individual, cooperative society, company or partnership firm can apply to establish an SEZ. The applicant must submit Form A to the concerned state government and the Board of Approval (BoA) under the Department of Commerce, Ministry of Commerce and Industry.

An applicant’s proposal will be reviewed by the BoA only after receiving the state government’s recommendation. Following formal approval, the concerned Development Commissioner inspects the proposed site and submits a report confirming that the land is contiguous and vacant.

Minimum land requirements

Applicants must meet the prescribed land requirements, which vary according to the type of SEZ and its proposed location:

• General SEZs and Free Trade and Warehousing Zones (FTWZs): The proposed zone must cover at least 50 hectares of contiguous land.
• Specified states and Union Territories: The minimum requirement is 25 hectares for SEZs proposed in Assam, Meghalaya, Nagaland, Arunachal Pradesh, Mizoram, Manipur, Tripura, Himachal Pradesh, Uttarakhand, Sikkim and Goa, as well as in Union Territories.
• IT/ITES, biotechnology and specified health services: No minimum land area applies to SEZs established for IT/ITES, biotechnology or health services, excluding hospitals. However, applicants must meet the minimum built-up processing area requirements prescribed under the SEZ (Third Amendment) Rules, 2019, notified on 17 December 2019.

Businesses should assess land eligibility and applicable processing-area requirements before submitting an application. The relevant requirements depend on the proposed SEZ category and location.

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Vizag Semiconductor SEZ: Investment and operational details awaited

The November 2026 notification does not disclose the project’s proposed capital investment, manufacturing capacity, technology specifications or expected commercial operations date. It also does not identify whether the facility will undertake semiconductor wafer fabrication, assembly, testing, packaging or other manufacturing activities.

The notification confirms the SEZ’s legal and administrative status but does not establish that construction or commercial production has commenced.

For chip manufacturers, component suppliers, equipment providers and prospective investors, the next step is to monitor project investment details, technology partnerships, infrastructure development, production capacity and operational timelines. These details will help determine the project’s potential contribution to Andhra Pradesh’s semiconductor manufacturing ecosystem.