Overview of Export Promotion Capital Goods (EPCG) Scheme

To increase and improve the manufacturing quality of Indian goods in international markets, the Export Promotion Capital Goods (EPCG) scheme was introduced. The scheme enables exporters to import capital goods that can be used to produce high-quality final products to be exported from India. Through EPCG scheme, exporters can export goods like spare parts for pre-production, production and post-production at zero customs duty.

The core objective of the EPCG Scheme is to bolster the competitiveness of Indian exports by streamlining the import of capital goods essential for the production of goods and services.

Furthermore, it seeks to stimulate increased investments in the manufacturing sector, thereby contributing to the overall growth and dynamism of the nation's industrial landscape. In essence, the EPCG Scheme stands as a key driver for advancing the capabilities and global standing of Indian businesses through strategic import facilitation and industry advancement.

Benefits of Export Promotion Capital Goods (EPCG) Scheme

Within the framework of the EPCG Scheme, eligible exporters are granted the opportunity to import capital goods at a concessional rate of customs duty.

This advantageous rate stands at 3% for the majority of sectors, with specific specified sectors enjoying an even more favorable rate of 0%.

Furthermore, the EPCG Scheme extends its benefits to cover the import of spares, moulds, and dies for the capital goods brought in, all at a concessional rate of customs duty—subject to specific conditions.

For instance, exemptions may be granted when the capital goods face destruction or obsolescence, or when the exporter attains a specified level of exports, demonstrating a flexible and pragmatic approach to support businesses participating in the scheme.

Fees 

For a customized and attractive quotation, please contact us with your product details to  Rekh Atri (+91 98118 03136) or Manju Laur (+91 9711994042).

Process to apply for Export Promotion Capital Goods (EPCG) Scheme

To avail the benefits of the EPCG Scheme, an exporter must apply to the DGFT in the prescribed format along with the necessary documents, including a copy of the IEC, a copy of the export-import license, a copy of the project report, and a copy of the proforma invoice of the capital goods to be imported.

1. Register with the licensing authority Director General of Foreign Trade (DGFT) or log into your account.
2. Select Services -> Online E-com Application.
3. Select EPCG.
4. Fill in the relevant information and upload the supporting documents.

Submit your application.

Eligibility Criteria for the EPCG Scheme:

To be eligible for the EPCG Scheme, an exporter must meet the following criteria:

1. Manufacturer Exporter or Tied Merchant Exporter: The exporter should either be a manufacturer exporter or a merchant exporter closely affiliated with a supporting manufacturer.
2. Valid Import Export Code (IEC): Possession of a valid Import Export Code (IEC) issued by the Director General of Foreign Trade (DGFT) is a prerequisite.
3. Compliance with Exporter Lists: The exporter should not feature in the Negative List of Exporters and should steer clear of the caution list maintained by the Reserve Bank of India (RBI).
4. Minimum Export Turnover: The exporter must demonstrate a minimum export turnover of Rs. 1 crore in the preceding year, showcasing an established track record in international trade.
5. Remaining Export Obligation: A critical requirement is that the exporter should maintain a minimum remaining export obligation, equivalent to 1.5 times the duty saved amount on the capital goods imported under the scheme.