India Changes Domestic Sourcing Requirements for SEZs

India recently announced that goods procured from its Special Economic Zones will qualify as fulfilling the country’s “mandatory domestic sourcing requirements,” according to a March 4 report from the Hong Kong Trade Development Council. The SEZs normally serve as “export-processing zones” and are deemed overseas territories for purposes of “applying the country’s customs regulations,” the report said. Goods produced in facilities in those zones are normally considered overseas and liable for customs duties. The change means that SEZ goods “actually produced” in India qualify for its domestic sourcing requirements, but goods “containing overseas-manufactured input material” are “specifically excluded.”