Adani Ports and Special Economic Zone Limited (APSEZ) reported strong operational performance for January 2026, with total cargo handling reaching 44.8 MMT, marking a robust 12% year-on-year growth. The diversified port operator demonstrated resilience across multiple cargo segments during the month.

Cargo Performance Analysis

The company's cargo handling performance showed broad-based growth across key segments:

Containers emerged as the strongest performing segment with 16% year-on-year growth, followed by liquids which recorded an impressive 21% increase. Dry cargo also contributed positively with 8% growth during the month.

Logistics Operations

APSEZ's integrated logistics operations showed mixed results during January 2026:

The rail logistics segment maintained steady growth momentum with 59,308 TEUs handled during the month, representing a 3% year-on-year increase. However, GPWIS (Gujarat Pipavav Inland Waterways and Infrastructure Services) volume remained stable at 1.9 MMT with no change compared to the previous year.

Performance Highlights

The January 2026 results underscore APSEZ's operational efficiency and market positioning. The company successfully handled 3.4 MMT of NQXT cargo as part of its total cargo volume, demonstrating its capability to manage diverse cargo types. The double-digit growth in total cargo handling reflects the company's strong market presence and operational capabilities across its port network.

As industry stakeholders finalize their wishlist for the Union Budget 2026, a contentious debate has emerged over customs duty relief for Special Economic Zone (SEZ) units selling goods into the domestic market. The proposal has divided industry leaders and policy experts, highlighting fundamental questions about India's manufacturing strategy and trade policy direction.

Current SEZ Duty Structure Creates Competitive Challenges

Under existing regulations, SEZ units face a complex duty structure that industry bodies argue creates significant competitive disadvantages. While domestic manufacturers can supply raw materials and inputs to SEZ units without restrictions, finished or semi-finished goods sold by SEZs into the domestic tariff area attract full import duties.

Industry representatives contend this structure undermines India's manufacturing competitiveness, particularly as the country pursues aggressive growth under Make in India initiatives while simultaneously expanding its free trade agreement portfolio.

Industry Advocates for Targeted Duty Reform

Aurag Sehgal, Principal at Price Waterhouse & Co LLP, articulates the industry's position as a measured approach aligned with government policy objectives. According to Sehgal, SEZ units should pay customs duty only on the portion of inputs that were imported duty-free, rather than on the entire value of goods cleared into the domestic market.

Sehgal emphasizes that this demand must be viewed within India's evolving trade and manufacturing ecosystem. With multiple FTAs being negotiated and signed, companies are fundamentally re-evaluating supply chains and manufacturing locations. In this environment, he argues, SEZs should realize their full potential not just as export enclaves but as competitive manufacturing hubs supporting domestic industry.

The approach was previously envisaged under the proposed DESH Bill, which sought to replace the SEZ Act but has remained stalled. While the Bill included both procedural and fiscal reforms, the government has already implemented regulatory easing by amending SEZ rules, including relaxing land requirements for priority sectors such as semiconductors and electronics.

Policy Experts Raise Tariff Parity Concerns

Former Central Board of Indirect Taxes and Customs (CBIC) chairman Najib Shah presents strong opposition to the industry's demand, cautioning against diluting SEZs' original purpose. Shah emphasizes that SEZs were created as specialized export-oriented zones designed to overcome India's domestic infrastructure, logistics, and regulatory constraints.

These zones already enjoy significant advantages not available to domestic tariff area manufacturers:

• Duty-free imports for manufacturing purposes
• Easier compliance norms and regulatory procedures
• Superior infrastructure and logistics facilities
• Streamlined export-oriented operational framework

Shah argues that allowing SEZ units to sell into the domestic market at lower duty rates would distort tariff parity and disadvantage domestic manufacturers who operate without similar benefits. He distinguishes between FTAs and SEZs, noting they serve different policy objectives—FTAs focus on tariff reduction and market access, while SEZs enable competitive exports through frictionless manufacturing environments.

Export Performance Supports Current Framework

Shah points to SEZ export performance as evidence that the zones continue delivering on their core mandate, with export numbers reaching approximately ₹170.00 billion in the previous year. This performance suggests SEZs can complement FTAs by producing competitive export goods rather than seeking preferential domestic market access.

Critical Policy Decision Ahead of Budget 2026

The debate highlights a fundamental policy question confronting the government: whether SEZs should evolve beyond their export-first design to support India's broader manufacturing ambitions, or whether maintaining tariff parity and original export focus remains critical for protecting domestic industry.

With Budget 2026 discussions intensifying, the government must balance industry calls for manufacturing flexibility against concerns over revenue impact and competitive fairness. The decision—whether involving targeted duty adjustments, further procedural reforms, or maintaining the status quo—will likely shape SEZs' future role in India's trade and industrial strategy.