An SEZ is an enclave within a country that is typically duty-free and has different business and commercial laws chiefly to encourage investment and create employment.
In this zone, industries get some tax advantages.
The Parliament passed the Special Economic Zones Act in 2005 after many consultations and deliberations and it came into force in 2006.
SEZs were operational in India from 2000 to 2006 (under the EXIM policy/Foreign Trade Policy).
Special Economic Zones Act, 2005
"It is defined as an Act to provide for the establishment, development, and management of the Special Economic Zones for the promotion of exports and for matters connected therewith or incidental thereto".