100% WFH for SEZs under discussion

In July 2022, the Department of Commerce notified a new Rule, namely Rule 43A – Work from Home (WFH) in Special Economic Zones (SEZ) Rules. While Rule 43A allows 50% of the employees in SEZ to WFH, the Ministry of Commerce & Industry is contemplating to give 100% WFH in the coming future. Will this pave way for SEZs to adopt a flexible, hybrid mode of work?


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New Delhi, November 8: The workforce culture across the world has transformed dynamically in less than three years. While it began as a need of the hour amid the outbreak of COVID-19 virus, the option of Work From Home has now become a popular choice in many industry segments.

Work From Home adoption by India

When COVID-19 pandemic began, India was quick to adopt Work from Home (WFH) mode for most of its industry segments and subsequently adopted hybrid work culture in the following years. But as of 2022, it has become clear that with or without the existence of the pandemic, hybrid work mode is here to stay.

On November 4th, 2022, the Union Minister of Commerce & Industry, Piyush Goyal, held discussions with stakeholders of Special Economic Zones (SEZs) on the issue of WFH facility. The consultations assume significance as the ministry is considering allowing 100% WFH for employees of units in SEZs.

India Business & Trade (IBT) spoke with industry experts to get a perspective on the possible outcome of a 100% WFH provision for SEZs. In July 2022, the Department of Commerce notified a new Rule, namely Rule 43A – Work from Home in Special Economic Zones Rules, 2006.

The notification was issued on demand from the industry for making a provision for a country wide uniform Work From Home (WFH) policy across all SEZs. The rule, however, has proven to be selectively beneficial for the IT and ITES segment.

Speaking to IBT, P C Nambiar, Director, Group EXIM at Serum Institute of India Pvt Ltd, explained that the WFH provision has been beneficial for the IT sector, as the industry does not require physical infrastructure for manufacturing or use heavy machinery.

He added, however, that an entity such as Serum Institute, which is the only biotech industry in Maharashtra with a workforce of 7,300 people, has a different operational model. As the company produces and manufactures vaccines, the employed workforce is required to work on-site.

Need to define WFH for different SEZs segment

Professor Arpita Mukherjee of ICRIER says that the government should define the phrase WFH, remote working clearly for the SEZ. In July, the rule 43A of WFH in SEZ was rolled out, extendable for up to 50% of total employees.

She also agreed that an employee in the IT industry can work from home given the limited need for an elaborate infrastructure or machinery. But for industries such as gems & jewellery, which includes operation of heavy machinery, the employed workforce is required to be present on-site for production and manufacturing. Employees at administrative or managerial level can choose to work remotely. However, SEZ activities are largely reliant on manufacturing of end-products which requires labour force & project supervisors to be present at the site.

Professor Mukherjee cautioned that a WFH atmosphere in SEZ may also raise safety concerns like data theft or unethical practices. For instance, an entity may build physical infrastructure to accommodate 50 employees and hire over 200 personnel.

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