EPCG Scheme – Export Promotion Capital Goods Scheme

Duty-free import of capital goods for production, pre-production, and post-production under export obligation.

Overview

The Export Promotion Capital Goods (EPCG) Scheme allows exporters to import capital goods, including spares for pre-production, production, and post-production, without paying any customs duty. The primary goal is to promote exports by enabling businesses to access advanced machinery and technology to improve productivity and competitiveness.

The EPCG scheme plays a critical role in boosting Indian exports by offering financial incentives and duty exemptions. Exporters need to apply to the Directorate General of Foreign Trade (DGFT) with the required documents to obtain the EPCG license. Once approved, they can import the capital goods duty-free, subject to fulfilling export obligations.

Objectives

  • Promote Indian exports by providing access to advanced capital goods.
  • Improve quality and competitiveness of exported products.
  • Encourage technological upgradation in manufacturing and services sectors.

Eligibility Criteria

Merchant Exporters

  • Purchase finished goods from manufacturers and export under own brand.
  • Must have supporting manufacturers using imported capital goods under EPCG.

Manufacturer Exporters

  • Directly involved in manufacturing for exports.
  • Can import capital goods to upgrade factories and increase output.

Service Providers

  • Companies offering services to overseas clients are eligible.
  • Includes cross-border trade, consumption abroad, commercial presence, and presence of natural persons.

Documents Required

1.Import Export Code (IEC)
2.Digital Signature
3.PAN Card
4.Registration cum Membership Certificate (RCMC)
5.Registration Certificate from Tourism Department (if applicable)
6.Excise Registration (if registered)
7.GST Registration Certificate
8.Company Brochure
9.Proforma Invoice
10.Self-certified Certificate from Chartered Accountant
11.Self-certified Certificate from Chartered Engineer

Products Covered

  • Plant, machinery, equipment, or accessories for manufacturing or production of goods or services.
  • Machine tools, packaging machinery, power-generating sets, refrigeration equipment, testing instruments.
  • Equipment for R&D, quality control, and pollution control.
  • Capital goods for mining, agriculture, horticulture, poultry, fisheries, and services sector.
  • Second-hand capital goods without age restriction.
  • Computer systems and software in CKD/SKD condition.

Benefits

  • Duty-free import of capital goods, subject to export obligation.
  • Export obligation equivalent to six times the duty saved, to be fulfilled within six years.
  • Cost-effective production through elimination of import duties.
  • Encourages investment and improves ESG scores to attract foreign investment.
  • Facilitates access to advanced technology, enhancing efficiency and global competitiveness.