Starting up in Infopark or a Kochi SEZ

Eight zones in Ernakulam, and they are not interchangeable

The Department of Commerce publishes a state-wise list of operational SEZs. On the list current to 31 December 2025, Kerala has nineteen, and eight of them are in Ernakulam district: the Cochin Special Economic Zone, entered simply as Cochin and physically at Kakkanad, type multi-product; Infopark at Kakkanad, IT and ITES; two port-based zones held by Cochin Port Trust, one at Vallarpadam in Mulavukadu and Fort Kochi villages and one at Puthuvypeen; a KINFRA zone for electronics industries in Thrikkakara village, Kanayannur taluk; an IT and ITES zone held by Sutherland Global Services in Thrikkakara North; Smart City (Kochi) Infrastructure at Kakkanad; and a second Infoparks Kerala notification covering Puthencruz and Kunnathunadu villages in Kunnathunad taluk. Thiruvananthapuram, the next largest cluster, has five.

Two things decide which door you knock on. The first is developer versus unit. Everything named above is a developer or co-developer. You will be a unit inside one of them, and the developer has to confirm in writing that space is available before your proposal can even be approved.

The second is the sector the zone was notified for. A zone notified for IT and ITES cannot host a precision engineering unit, however much floor space is empty. Of the eight, only the Cochin SEZ is multi-product, which is why an electronics assembler, a food processor and a software firm can all sit inside the same fence at Kakkanad and none of them could sit inside Infopark.

The tax holiday closed in 2020, and the portal says so in brackets

The Memorandum explaining the provisions of the Finance Bill, 2016 set out a phase-out table for profit-linked deductions. Against section 10AA it records the measure in one line: no deduction shall be available to units commencing manufacture or production of an article or thing, or starting to provide services, on or after 1 April 2020, from previous year 2020-21 onwards. That date arrived and was not extended.

The Department of Commerce's facilities and incentives page still leads with the old benefit — 100 per cent of export income for five years, 50 per cent for five more, 50 per cent of ploughed-back profit for five after that. The qualifier is there, in brackets at the end of the sentence: sunset clause for units effective 01.04.2020. A second bracket on the same page gets missed even more often. The developer's deduction under section 80-IAB, ten years in a block of fifteen, carries its own sunset, effective 01.04.2017. Anyone still quoting either benefit at you has read the first half of a sentence.

What the page lists as live is thinner. Duty-free import and domestic procurement for authorised operations. Zero rating of supplies to SEZs under the IGST Act, 2017, which is where the old central sales tax and service tax exemptions went rather than being repealed. Single window clearance. The minimum alternate tax exemption was withdrawn from 1 April 2012 and the dividend distribution tax exemption from 1 June 2011, both recorded on the page.

One wrinkle for 2026: the Income-tax Act, 2025 has replaced the 1961 Act, and the Finance Bill, 2026 works off the new numbering. Give your accountant the substance, not the old section number.

Form F, the Letter of Approval, and the clock it starts

Rule 17 of the SEZ Rules, 2006 calls for one consolidated application in Form F, in five copies, to the Development Commissioner with a copy to the developer. Consolidated is meant literally: the same form covers setting up the unit, annual sub-contracting permission, allotment of an Importer-Exporter Code, allotment of land or sheds, water and power connections, building plan approval, approval from the Inspectorate of Factories and pollution control clearance. It also still lists sales tax registration and small scale industry registration, which tells you how long parts of the rule have gone unrevised.

A note on sources, because it matters here. The consolidated rules file on the SEZ portal is titled as incorporating amendments till May 2009. The portal's separate amendments index is the live document, and we checked every rule quoted in this article against it. Rule 18 was amended in June 2024, but only at sub-rule (4)(d), on reconditioning and repair.

Rule 18(1) gives the Approval Committee fifteen days from receipt to approve, approve with modification or reject, with reasons recorded in writing; where the Board of Approval decides, forty-five days. Rule 18(2) lists what the Committee must be satisfied about: the positive net foreign exchange requirement in Rule 53, a written provisional offer of space from the developer, an undertaking on environmental and pollution norms, proof of residence of the proprietor, partners or directors, and income tax returns or three years of audited balance sheets. A proviso inserted in 2009 matters more than it looks. A copy of the registered lease deed has to reach the Development Commissioner within six months of the Letter of Approval, failing which the Committee may withdraw the approval after giving you a hearing.

The bond, the annual report and the five-year sum

Rule 19(4) is a stopwatch. The Letter of Approval is valid for one year, within which you must commence production or service. The Development Commissioner may extend it by up to two further years for reasons recorded in writing, and grant one more year only if two-thirds of the work including construction is complete and a chartered engineer certifies it. Miss that and the approval is deemed lapsed from the date its validity expired.

Before anything moves, you execute a Bond-cum-Legal Undertaking in Form H, jointly accepted by the Development Commissioner and the Specified Officer. Rule 22 fixes its value at the effective duties that would have been leviable on your projected three-month requirement of capital goods, raw materials, spares, consumables, intermediates, components, parts and packing materials but for their admission into the zone. If it falls short, you furnish a fresh or additional bond. There is no debiting and crediting against it; it is monitored quarterly or yearly against your progress reports, and it is deemed accepted if nobody responds within seven working days. Form H was itself amended on 9 July 2026, so work from the current text.

Then the reporting: records kept for seven years from the end of the relevant financial year, separate records if you both trade and manufacture, and an Annual Performance Report in Form I to the Development Commissioner, which goes before the Approval Committee.

Rule 53 is the obligation everything else hangs off. Positive net foreign exchange equals A minus B, greater than zero, cumulative over five years from commencement of production. A is FOB export value plus a long list of deemed exports, including services rendered inside the zone or in the domestic tariff area and paid for in free foreign exchange. B is the CIF value of imported inputs and capital goods over the period.

Cochin SEZ at Kakkanad: how allotment actually works

The Cochin SEZ Authority publishes an Operation Manual (Allotment), ordered at its meeting of 9 August 2010 and signed by the Chairman on 10 August 2010. It is still the governing document on the Authority's site, and it is unusually specific. The zone has 103 acres at Kakkanad as processing area, of which 70 acres is the net area developed into plots and factory sheds: 45 developed plots totalling 245,848 square metres, nine single-storey Standard Design Factories at 13,752 square metres, four multi-storey Standard Design Factory buildings at 66,740 square metres, and a single-storey warehouse.

You apply for space in Form I, supported by the promoters' background, a project profile with projected exports and employment, the space requirement with land use and construction plan and schedule, and annual power and water requirements. Applications are serially numbered and placed before the Chairman within three days along with the schedule of vacant space. The manual states plainly that the Chairman has full discretion to reject any application without assigning reasons and that no further correspondence will be entertained. Applications the Authority cannot service for power or water are rejected outright.

An approved applicant gets a Tentative Letter of Allotment in Form II, and then has fifteen days to file the Rule 17 application to the Development Commissioner. The Firm Letter of Allotment in Form III follows only on production of the Letter of Approval and receipt of advance rent for the first year. The lease runs fifteen years with an option to renew for fifteen. One quiet trap sits in paragraph 20: an allottee of built-up space may not use the zone as its registered address with the Registrar of Companies.

Signing the lease, and the deadlines around it

The execution sequence is where allotments get cancelled, and it runs on two documents that do not say quite the same thing.

The Authority's manual gives you one month from the date of the Firm Letter of Allotment to execute the lease agreement in Form V or VA, signed by the managing director, directors or an authorised person. It requires the deed to be signed before a notary public, submitted to the Authority, and after execution registered with the jurisdictional sub-registrar. The original bearing the registration stamp must come back to the Authority within three weeks of being handed over for registration; if it does not, the allotment stands cancelled, and the original stays in the Authority's possession for the life of the lease.

The Development Commissioner's own how-to-apply guidance adds the physical details. Three fair copies typed on green ledger paper, single-sided, double-spaced. The authorised signatory must attend the Zone office in person to execute the deed, and must then appear in person before the Sub-Registrar at Thrikkakara to complete registration. That page also states that the registration is exempt from duties under the Stamp Act and from registration charges — a real saving against the ordinary Kerala lease rates, and worth confirming with the Development Commissioner's office, because the same page is otherwise pre-GST and unreliable on tax.

One more term travels with the deed. Paragraph 9.3 requires the lease to carry a condition that exports meet the Schedule III parameter on an annual basis, and failure, unless condoned by the Chairman, results in cancellation and eviction.

What CSEZ charges, and why we will not print a current rent

Schedule I to the same manual sets the rates: Rs 110 per square metre per annum for a developed plot, and Rs 830 per square metre per annum for Standard Design Factory space, single or multi-storey, on a fifteen-year lease with an option to renew for fifteen. Those figures are labelled as being for 2010-11.

Paragraph 6.4 explains why they will not have stayed there. On completion of every third year of the lease, counted from the date the first instalment of rent was remitted, rents are enhanced at a rate approved by the Authority — normally 15 per cent, described in the manual as the normal inflation rate, and up to 25 per cent if the Authority considers it fit. The revision is approved at the last meeting of each financial year and Schedule I stands amended accordingly. Compounding a 2010-11 base across sixteen years would produce a confident-looking number that is our arithmetic and nobody's published rate. Ask the Authority.

Two charges are structural rather than inflationary. Common area in a multi-storey building, where it is allotted at all, is charged at 125 per cent of the standard rate, as compensation for limiting access. Late rent attracts 12 per cent a year for up to thirty days; beyond thirty days the manual says no further delay will be permitted and proceedings begin under the Public Premises (Eviction of Unauthorised Occupants) Act.

Schedule III is the yardstick your application is judged against — projected exports per square metre by sector. Rs 1,00,000 for textiles and garments, Rs 3,50,000 for engineering, Rs 6,00,000 for electronic hardware, Rs 35,00,000 for IT, ITES and trading, and Rs 2,00,00,000 for gems and jewellery.

Infopark is a landlord, not a customs zone

Infopark is the Kerala government's IT park operation, and its space availability page lists five buildings at Kakkanad, all marked SEZ: Athulya, Athulya Annexe, Jyothirmaya, Indeevaram and Chaithanya. Athulya Annexe is listed as commercial rather than IT office space.

Allotment in government-owned buildings is a queue. You send a Letter of Intent to the Chief Executive Officer with a company profile, your business activity and your space requirement; allocation is on a first-come, first-served basis; when something frees up you are invited to submit a detailed business plan and supporting documents for evaluation, and the park reserves the right to accept or reject on the proposal. Rental and commercial terms, in the park's own words, are shared with shortlisted applicants. That is the honest reason no article can quote you an Infopark rent.

A caution about the other document everyone cites. Kerala's Information Technology Policy 2023, published in September 2023 by the Department of Electronics and Information Technology, is marked on its face as a draft for discussions only, and the Startup Mission site hosting it invites public feedback. We could not confirm a notified final version. Read as a draft, it proposes treating every recognised IT space — inside a park or outside, government-owned or private — as a Deemed IT Park; routing dealings with the labour departments, ESI, the fire service, the pollution control board, the provident fund department, the electrical inspectorate and the Cochin local bodies through the park as a single touch point; and leasing SEZ and non-SEZ land parcels for a maximum of 99 years at a time. It also records that building and property tax for companies leasing government-owned buildings is already paid by the Government. Confirm any of that in writing before you price it in.

What actually changes day to day inside the fence

The processing area is customs territory with a Specified Officer in it. Under Rule 40, goods moving between the non-processing and processing areas, or between two processing areas of the same zone, travel on serially numbered challans pre-authenticated by the owner, managing director, working partner, company secretary or another duly authorised person, and carrying a complete description of the goods. Rule 75 saves you from the worst of it: unless a rule says otherwise, inward and outward movement is on self-declaration, with no routine examination unless the Development Commissioner or Specified Officer orders it.

Selling to Indian customers is permitted, but it is treated as an import. Rule 47(1) read with section 30 of the SEZ Act puts domestic tariff area sales to customs duty, with an import licence required wherever one would be needed to import similar goods into India. Goods you imported or bought domestically and resell without any manufacturing process are subject to Foreign Trade Policy conditions as applicable to imports.

Staff flexibility is better than the folklore. The Special Economic Zones (Fourth Amendment) Rules, 2023, G.S.R. 824(E) of 7 November 2023, substituted Rule 43A and retitled it hybrid working. It covers employees of IT and ITES units, employees temporarily incapacitated, employees travelling and employees working offsite, and sub-rule (4) says the facility may cover all the employees of a unit. You intimate the Development Commissioner by e-mail on or before the day you permit it, and keep the list rather than filing it. G.S.R. 786(E) of 26 December 2024 replaced the expiry date in sub-rule (3) with 31 December 2027.

When the answer is no

If most of your revenue is rupee revenue from Indian customers, an SEZ is the wrong instrument. The export obligation is not a condition attached to the benefit; it is the product. Against it you carry a bond, annual performance reports, quarterly monitoring, a customs-controlled perimeter, and an exit under Rule 74 that costs applicable duties on imported and indigenous capital goods, raw materials, components, consumables, spares and finished goods in stock — plus, if positive net foreign exchange was never achieved, penalty under the Foreign Trade (Development and Regulation) Act, 1992.

There is now a cleaner alternative inside the same buildings. The Special Economic Zones (Fifth Amendment) Rules, 2023, notified as G.S.R. 881(E) on 6 December 2023, inserted Rule 11B. On a developer's request the Board of Approval may demarcate part of the built-up area of an IT or ITES SEZ as non-processing area, for businesses engaged in IT or ITES generally. It must be a complete floor; part of a floor cannot be demarcated. The developer first repays, without interest, the tax benefits attributable to that area on a chartered engineer's certificate, and demarcation is refused if it drops the processing area below half the total or below the built-up minimum for that category of city. Occupiers get none of the rights or facilities available to SEZ units and are subject to the same central law as any entity in the domestic tariff area. For a company that does not export, that is exactly the right trade.

For a small services company the ordinary Kerala route may be enough. K-SWIFT issues a certificate of in-principle approval to non-red-category MSMEs under the Kerala Micro Small and Medium Enterprises Facilitation Act, 2019, standing in for building permits, trade licences and other statutory approvals for three and a half years from approval.