The Export Promotion Capital Goods (EPCG) Scheme is a flagship initiative introduced by the Directorate General of Foreign Trade (DGFT) under Chapter 5 of the Foreign Trade Policy (FTP) 2015-20. It is designed to boost India’s manufacturing competitiveness in the global market by facilitating the import of high- quality capital goods at zero customs duty. These imported goods are then used in pre-production, production, and post-production activities to manufacture export-ready products.
Capital goods covered under the EPCG Scheme include:
- Machinery and tools in their semi-knocked down (SKD) or completely knocked down (CKD) condition.
- Computer systems and software used as components or parts of capital goods.
- Moulds, dies, fixtures, jigs, catalysts, and other related items.
- Spare parts required for the initial setup or an additional charge.
Objective of the Scheme :
Objective behind this scheme is to enable or help the exporters to get exemption from the duty charged by government on import of capital goods.
Key Features of the Scheme :
Conclusion:
The Export Promotion Capital Goods (EPCG) Scheme is an invaluable tool for Indian exporters to save costs, upgrade technology, and expand their global footprint. While the scheme requires adherence to strict obligations and procedures, the long-term benefits far outweigh the challenges. Whether you are a manufacturer looking to scale your production or a service provider aiming to go global, the EPCG scheme offers a structured pathway to achieve your export goals.
By understanding the finer details of this scheme and staying compliant with its requirements, Indian exporters can significantly enhance their competitiveness in international markets. If you’re planning to apply for EPCG authorization, ensure you have a clear roadmap for fulfilling your Export Obligation to fully reap its benefits.