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EPCG License

The EPCG (Export Promotion Capital Goods) Scheme is a Government of India initiative designed to promote export-oriented production by facilitating the import of capital goods at concessional or zero customs duty, subject to prescribed export obligations. Administered by the Directorate General of Foreign Trade (DGFT), the scheme supports technology upgradation, enhances productivity and global competitiveness, and reduces the overall cost of capital investment for eligible exporters. By encouraging the adoption of modern technology and efficient production systems, the EPCG Scheme contributes to sustainable industrial growth and strengthens India's export potential.

What Is EPCG Scheme?

The EPCG (Export Promotion Capital Goods) Scheme is a concessional import scheme that enables eligible exporters to import capital goods at reduced or zero customs duty, subject to fulfilment of prescribed export obligations. Under the scheme, businesses can import machinery, equipment, and technology required for production at preferential rates, thereby reducing the overall cost of capital investment.

By facilitating access to advanced technology and modern equipment, the EPCG Scheme helps enhance productivity, improve global competitiveness, reduce production costs, and strengthen the export performance of Indian industries.

Key Characteristics

  • Expert Assessment: Evaluation of capital goods and import requirements in line with the applicable export obligations.
  • Concessional Customs Duty: Import of eligible capital goods at zero or concessional customs duty, subject to prescribed conditions.
  • Defined Export Obligation: A specific export obligation must be fulfilled within the stipulated timeframe as prescribed under the scheme.
  • Cost & Technology Benefits: Reduced capital investment and production costs, along with improved access to advanced machinery and technology.
  • Streamlined DGFT Process: Application, amendments, and related approvals can be managed efficiently through the DGFT online portal.
  • Compliance & Monitoring: Regular monitoring of export performance, documentation, and compliance to ensure timely fulfilment of the prescribed export obligations.

Why the EPCG Scheme is Important

The EPCG Scheme plays a vital role in strengthening India's export competitiveness and supporting industrial growth. Its key benefits include:

Reduces Production Costs

Enables eligible exporters to import capital goods at concessional or zero customs duty, helping reduce overall manufacturing and investment costs.

Promotes Technology Upgradation

Facilitates access to advanced machinery, equipment, and technology, enabling businesses to modernize operations and improve productivity.

Enhances Global Competitiveness

Helps exporters reduce production costs and improve product quality, enabling them to compete more effectively in international markets.

Stimulates Export Growth

Encourages higher export performance by reducing the financial burden associated with acquiring modern capital goods and technology.

Boosts Industrial Investment

Creates a favorable environment for investment in modern manufacturing infrastructure and technology, supporting long-term industrial development.

Improves Cash Flow

Reduces the upfront customs duty burden on eligible

Industries Covered Under the EPCG Scheme

The EPCG Scheme is applicable across a wide range of export-oriented industries, enabling eligible businesses to import advanced capital goods and technology at concessional or zero customs duty, subject to prescribed export obligations.

  • Pharmaceuticals: Facilitates the import of advanced machinery, equipment, and technology for pharmaceutical manufacturing and drug production.
  • Electronics: Supports the acquisition of sophisticated equipment and production systems for manufacturing electronic products, components, and devices.
  • Automotive: Enables manufacturers to procure modern capital goods for vehicle and automotive component production, improving efficiency, quality, and productivity.
  • Textiles & Apparel: Supports the import of state-of-the-art machinery for textile processing, fabric production, garment manufacturing, and related activities.
  • Chemicals: Facilitates access to specialized machinery and advanced equipment for chemical processing, manufacturing, and production.
  • Industrial Machinery: Supports manufacturers across diverse industries by enabling access to modern machinery, equipment, and technology required for efficient industrial production.

How to Avail Benefits Under the EPCG Scheme

The process of obtaining and utilizing benefits under the EPCG Scheme involves the following key steps:

Initial Consultation

Assess the applicant's eligibility, proposed capital goods, export potential, and applicable export obligations, either with a DGFT advisor or through the relevant DGFT guidelines.

Application Submission

Register on the DGFT portal and submit the EPCG application with details of the proposed capital goods, import requirements, and applicable export commitments.

Documentation & Data Compilation

Prepare and compile the necessary technical, commercial, and financial documents, including product specifications, supplier quotations, manufacturing details, and supporting information related to export capability.

DGFT Review & Authorization

The DGFT reviews the application and supporting documents in accordance with the applicable EPCG provisions. Upon approval, an EPCG Authorization is issued specifying the permitted capital goods, applicable conditions, and prescribed export obligation.

Import & Implementation

After obtaining the authorization, eligible capital goods can be imported in accordance with the scheme's conditions. The authorization holder must use the imported goods for the intended purpose and comply with the applicable requirements.

Export Obligation Fulfilment

The authorization holder must fulfil the prescribed Export Obligation (EO) within the stipulated period and maintain appropriate records and supporting export documentation.

Monitoring & Compliance

Regular monitoring of imports, exports, documentation, and compliance ensures timely fulfilment of the export obligation and facilitates the eventual closure of the EPCG authorization with the DGFT.

Why Kelular

Kelular Consulting is a team of experienced professionals with in-depth knowledge of EPCG (Export Promotion Capital Goods) Scheme procedures, DGFT regulations, and export-import compliances. We assist businesses in obtaining an EPCG Authorisation for the import of eligible capital goods at applicable concessional or zero customs duty, subject to fulfilment of the prescribed Export Obligation.

Our team provides end-to-end support, from assessing eligibility and preparing documentation to filing the application, obtaining the EPCG Authorisation, managing amendments, and completing the required export obligation and closure formalities.

How Can Kelular Consulting Help?

  • EPCG Eligibility Assessment: We evaluate your business, capital goods, and export requirements to determine eligibility under the EPCG Scheme.
  • Application Preparation & Filing: Assistance in preparing and submitting the EPCG application through the DGFT portal.
  • Documentation Support: Guidance in preparing invoices, technical specifications, declarations, and other documents required for the application.
  • Export Obligation Guidance: Assistance in understanding and planning the export obligation applicable to the EPCG Authorisation.
  • DGFT Query Handling: Support in responding to deficiencies, clarifications, and queries raised by DGFT.
  • Amendment Support: Assistance with permitted amendments to EPCG Authorisations based on business requirements.
  • Redemption & EODC: Assistance with preparation and submission of documents for fulfilment of export obligation and obtaining the Export Obligation Discharge Certificate (EODC).
  • Clubbing & Closure: Guidance and support for eligible clubbing of EPCG Authorisations and completion of closure formalities.
  • Post-Licence Compliance: Guidance on maintaining the required records and complying with the conditions associated with the EPCG Authorisation.

Why Choose Kelular Consulting?

  • DGFT & EPCG Expertise: Strong understanding of the EPCG Scheme, Foreign Trade Policy, and DGFT procedures.
  • End-to-End Assistance: Support throughout the EPCG lifecycle—from application and issuance to export obligation fulfilment and closure.
  • Accurate Documentation: We help ensure that applications and supporting documents are properly prepared and aligned with DGFT requirements.
  • Export Obligation Expertise: Practical guidance to help businesses plan, monitor, and fulfil their export obligations within the prescribed period.
  • Professional Coordination: Assistance with DGFT communication, deficiencies, amendments, and application follow-up.
  • Compliance-Focused Approach: We help clients understand the conditions and procedural requirements associated with EPCG Authorisations.
  • Industry-Oriented Support: Our team considers your specific business operations, capital goods requirements, and export profile while providing practical solutions.

Your Trusted Partner for EPCG Authorisation

With Kelular Consulting, you receive professional guidance and comprehensive support to obtain, manage, fulfil, and close EPCG Authorisations efficiently while staying aligned with DGFT requirements.

Under the EPCG (Export Promotion Capital Goods) Scheme, eligible exporters can import a wide range of capital goods required for pre-production, production, and post-production activities at zero customs duty, subject to applicable conditions.

Eligible capital goods may include:

  • Machinery and equipment
  • Components and spare parts
  • Tools and dies
  • Jigs and fixtures
  • Production and processing equipment
  • Computer systems and software required for production or related processes

Important: Second-hand or used capital goods are generally not permitted for import under the EPCG Scheme.

The EPCG (Export Promotion Capital Goods) Scheme is available to eligible manufacturer exporters, merchant exporters tied to supporting manufacturers, and service providers.

To apply under the EPCG Scheme, the applicant should generally:

  • Be a manufacturer exporter, merchant exporter with a supporting manufacturer, or an eligible service provider.
  • Hold a valid Importer Exporter Code (IEC) issued by DGFT.
  • Have a valid GST registration (GSTIN), wherever applicable.
  • Comply with the Export Obligation and other conditions prescribed under the Foreign Trade Policy and applicable EPCG provisions.

The EPCG Scheme covers a wide range of sectors, subject to the exclusions, conditions, and restrictions specified under the prevailing Foreign Trade Policy and related DGFT regulations.

Under the EPCG (Export Promotion Capital Goods) Scheme, the authorization holder is required to fulfil an Export Obligation (EO) equivalent to 6 times the duties, taxes, and cess saved on the capital goods imported under the scheme.

The total Export Obligation must generally be fulfilled within 6 years from the date of issue of the EPCG Authorization.

Additionally:

  • 50% of the total Export Obligation must be fulfilled within the first 4 years.
  • The remaining 50% must be fulfilled during the remaining 2 years.
  • Export obligations must be fulfilled in accordance with the applicable DGFT provisions and conditions of the EPCG Authorization.

In simple terms: Import capital goods under EPCG → save applicable duties → undertake exports worth 6 times the duty saved within the prescribed period.

Yes. The Export Obligation (EO) period under the EPCG Scheme can be extended beyond the prescribed period of 6 years, subject to the applicable DGFT provisions and payment of the prescribed composition fee.

  • The Regional Authority (RA) may grant an extension of the Export Obligation period for up to 2 additional years.
  • In exceptional cases, further extension may be considered by DGFT Headquarters, subject to applicable conditions.
  • The application for extension should be submitted before the expiry of the original Export Obligation period.
  • The extension is subject to approval by the competent authority and payment of the applicable composition fee.

Important: Exporters should apply for an extension well before the expiry of the EPCG obligation period to avoid non-compliance and potential consequences under the Foreign Trade Policy.

If the Export Obligation (EO) under the EPCG Scheme is not fulfilled within the stipulated period, the authorization holder may be required to:

  • Pay the customs duties saved on the imported capital goods, along with the applicable interest as prescribed by the Customs authorities.
  • Face penalties and other actions in accordance with the applicable provisions of the Foreign Trade Policy and Rules.
  • Have the Bank Guarantee (BG), wherever furnished, invoked or encashed by the concerned authority, subject to the applicable terms and conditions.

Important: Timely monitoring and fulfilment of the Export Obligation is essential to avoid additional financial liability, penalties, and other compliance consequences under the EPCG Scheme.

EODC (Export Obligation Discharge Certificate) is a certificate issued by the DGFT after the EPCG Authorization holder has successfully fulfilled the prescribed Export Obligation and submitted the required supporting documents for verification.

The EODC serves as official confirmation that the Export Obligation under the EPCG Authorization has been fulfilled and, subject to the terms of the authorization, the holder has no further Export Obligation liability under that EPCG Authorization.

In simple terms:

Fulfil Export Obligation → Submit supporting documents → DGFT verification → EODC issued → EPCG obligation discharged.

 
     
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