EPCG Scheme: Zero-Duty Capital Goods for Indian Exporters — Frequently Asked Questions
Answers to the questions founders most often ask about EPCG Scheme: Zero-Duty Capital Goods for Indian Exporters — who qualifies, the funding amount, required documents and how the application works.
Frequently asked questions
What exactly does the EPCG Scheme give an exporter?
It waives the customs duty on capital goods you bring in for export-oriented activity, and extends the exemption to IGST and Compensation Cess for physical exports. That covers machinery, computer systems and the software integral to them, along with spares, moulds, dies, jigs, fixtures, tools, refractories and catalysts. The point is to cut the upfront cost of equipping a facility that serves overseas markets.
How much funding does the EPCG Scheme provide?
EPCG is not a cash grant with a fixed ceiling — the amount varies. Its value depends on the duties, taxes and cess that are saved on the particular capital goods you import or procure. The larger and more heavily taxed the equipment, the greater the saving, which is why the scheme reports no single amount.
Who is eligible to apply?
Manufacturer exporters (with or without supporting manufacturers), merchant exporters tied to supporting manufacturers, and service providers can apply. On the compliance side, you need an 'Active' IEC, DGFT Customer Portal access with E-Sign and DSC enabled, authorisation to draft and submit applications for that IEC, and GSTN details updated for the IEC's branches.
Is DPIIT or MSME registration required for EPCG?
No. DPIIT recognition and MSME registration are not among the conditions listed for this scheme. What the scheme asks for is an active IEC, working E-Sign and DSC credentials on the DGFT portal, and current GSTN details for the branches linked to your IEC.
What is the export obligation and how long do I have to meet it?
You commit to an export obligation equal to six times the duties, taxes and cess saved on the capital goods. That obligation normally has to be fulfilled within six years from the date the Authorisation is issued.
Can the export obligation be reduced?
Yes, in two situations. Exporters of Green Technology Products get it reduced to 75% of the export obligation. Units located in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, or Jammu and Kashmir get it reduced to 25%.
Does the scheme take equity in my company?
No. EPCG is a subsidy-style duty exemption, not an investment, so it takes no stake in your business. What you owe in return is export performance, not ownership.
Can I buy capital goods from an Indian supplier instead of importing them?
Yes. The scheme allows procurement of capital goods from indigenous sources as well as direct imports, which is intended to support domestic manufacturing and supply chains alongside your own expansion.
What if the item I want to import is a restricted one?
Items that are restricted for import or export are not cleared at the normal stage. They can be brought in under EPCG only after approval from the Exim Facilitation Committee (EFC) at DGFT Headquarters.
Is there a deadline, and how do I apply?
There is no fixed deadline — applications are accepted on a rolling basis. To apply, go to the DGFT website (www.dgft.gov.in), open the 'Services' menu and select 'EPCG', then log in to the DGFT Customer Portal. Make sure your active IEC is linked and e-Sign and DSC are enabled, then apply for an EPCG file number by filling in the online form with details of your IEC, GSTN, and the capital goods you intend to import or procure.
Who offers EPCG Scheme: Zero-Duty Capital Goods for Indian Exporters?
EPCG Scheme: Zero-Duty Capital Goods for Indian Exporters is offered by Ministry of Commerce and Industry, a government body. It is provided as non-dilutive funding.
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