Export Promotion Capital Goods (EPCG) Scheme

Duty-free import of capital goods against time-bound export obligation to boost competitiveness.

Overview

The EPCG Scheme enables eligible exporters to import capital goods (including spares for pre-production, production, and post-production) at zero customs duty, subject to fulfilling a time-bound Export Obligation (EO). The objective is to facilitate technology upgradation, improve quality, and enhance export competitiveness.

Authorization is granted by the Directorate General of Foreign Trade (DGFT). On approval, the authorization holder can import specified capital goods and must meet export obligations within the prescribed period, failing which duties saved plus interest become payable.

Objectives

  • Promote exports by enabling access to modern machinery and technology.
  • Reduce upfront import costs for capital goods to enhance competitiveness.
  • Encourage efficiency, quality improvement, and capacity expansion in export-oriented units.

Eligibility Criteria

Who can apply

  • Manufacturer exporters
  • Merchant exporters tied to supporting manufacturers
  • Service providers across four FTP modes (cross-border supply, consumption abroad, commercial presence, presence of natural persons)

What is covered as Capital Goods

  • Plant, machinery, equipment, or accessories used directly/indirectly in manufacturing or for rendering services
  • Machine tools, packaging equipment, power generation sets, refrigeration equipment, testing & R&D instruments, quality and pollution control equipment
  • Second-hand capital goods permitted without age restriction

Documents Required

Registration & Identity

  • Import Export Code (IEC)
  • PAN
  • Digital Signature
  • RCMC (as applicable)

Authorizations & Certificates

  • Certificate of Chartered Accountant (self-certified original)
  • Certificate of Chartered Engineer (self-certified original)

Application Enclosures

  • Proforma Invoice / Brochure of capital goods
  • GST registration (as applicable)
  • Excise registration (if applicable)
  • Tourism Department registration (if applicable)

Incentives

  • Zero customs duty on eligible capital goods imports against EPCG authorization
  • Potential cost savings that can be reinvested in technology and capacity
  • Facilitates ESG-aligned upgrades and efficiency gains through modern machinery

Activities Covered

  • Manufacturing, mining, agriculture & allied sectors (poultry, sericulture, viticulture, etc.)
  • Services sector including testing, R&D, quality and pollution control

Guidelines

  • Export Obligation (EO): Achieve exports equal to 6× the customs duty saved within 6 years.
  • Average Export Obligation (AEO): Maintain average exports of past 3 years for same/similar goods unless exempted.
  • Relaxations: EO can be reduced under specified conditions (e.g., local sourcing, certain regions, green technology).
  • Non-compliance: Duty saved becomes payable with applicable interest; continued DTA sale is contingent on EO compliance.

Statistics

Export Obligation Multiplier: 6× of duty saved amount

E O Period: 6 years from authorization

Coverage: Manufacturing & services (incl. R&D, testing, quality & pollution control)

Frequently Asked Questions

Duty-free import of eligible capital goods, subject to meeting export obligations in time.

EO equals six times the customs duty saved on the imported capital goods and must be fulfilled within six years.