Export Promotion Capital Goods Scheme (EPCG)
By Ministry of Commerce and Industry
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Quick Answer
The EPCG Scheme lets Indian exporters import capital goods at zero customs duty and IGST for pre-production, production and post-production activities, in return for an export obligation.
- Funding amount
- Varies
- Funding type
- Subsidy
- Application deadline
- Rolling
- Location
- Open to startups registered in India
About this subsidy
The Export Promotion Capital Goods (EPCG) Scheme, run by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry, lets you import capital goods at zero customs duty. For physical exports, the exemption also covers Integrated Goods and Services Tax (IGST) and Compensation Cess. You can also buy capital goods from indigenous sources.
Covered goods include machinery, computer systems and software integral to those machines, spares, moulds, dies, jigs, fixtures, tools, refractories and catalysts.
In return, you take on an Export Obligation (EO), typically six times the duties, taxes and cess saved, to be fulfilled over six years. Manufacturer exporters, merchant exporters tied to supporting manufacturers, and service providers can apply.
The export obligation can be reduced for exporters of Green Technology Products and for units in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Jammu and Kashmir. You need an Active IEC (Importer Exporter Code) and a login to the DGFT Customer Portal.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Subsidy providers
Benefits & Funding
What You Get
The EPCG scheme offers significant financial advantages by allowing the import of vital capital goods at zero customs duty, IGST, and Compensation Cess. This upfront saving dramatically reduces the capital expenditure for businesses engaged in export-oriented pre-production, production, and post-production activities. Beyond the direct duty waiver, the scheme provides flexibility in fulfilling export obligations, with potential reductions for exporters of Green Technology Products or units located in specific regions like Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Jammu and Kashmir. This targeted support enhances the competitiveness of Indian exports and promotes sustainable and regional economic development.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
Applications are reviewed by the Directorate General of Foreign Trade (DGFT) to ensure compliance with the Foreign Trade Policy (FTP) and specific scheme conditions. Verification includes checking the applicant's IEC status, GSTN details, and the nature of capital goods to be imported. Approval is granted upon successful verification of all eligibility criteria and adherence to the stated export obligations. In cases involving restricted import or export items, approval from the Exim Facilitation Committee (EFC) at DGFT Headquarters is required.
Application Process
- 1
Navigate to DGFT Portal
The importer or exporter accesses the DGFT website and navigates to the EPCG section under 'Services'.
You - 2
- 3
How to apply
Four steps from draft to disbursement — one action each.
- 1
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 2
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 3
Submit on the official portal
Use the official application link and verify all details before final submission.
- 4
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the primary benefit of the EPCG Scheme?
The primary benefit of the EPCG Scheme is the ability to import capital goods, including machinery, software, spares, and tools, at zero customs duty, IGST, and Compensation Cess for use in export-oriented pre-production, production, and post-production activities.
Who is eligible to apply for the EPCG Scheme?
The scheme is open to manufacturer exporters (with or without supporting manufacturers), merchant exporters tied to supporting manufacturers, and service providers. Applicants must possess an active IEC and comply with DGFT portal requirements.
What is the Export Obligation under the EPCG Scheme?
Under the EPCG Scheme, applicants must fulfill an Export Obligation (EO) equivalent to 6 times the duties, taxes, and cess saved on the imported capital goods. This obligation must typically be met within six years from the date of Authorisation issuance.
Are there any conditions for importing restricted items under EPCG?
Yes, import of items that are restricted for import or export shall be permitted under the EPCG Scheme only after obtaining approval from the Exim Facilitation Committee (EFC) at DGFT Headquarters.
How can the export obligation be reduced?
The specific export obligation can be reduced in certain cases, such as for exporters of Green Technology Products (75% of EO) or for units located in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Jammu and Kashmir (25% of EO).
Is the EPCG scheme open to new businesses or only established exporters?
The scheme is primarily aimed at businesses engaged in export activities, including manufacturer exporters, merchant exporters, and service providers. While no explicit age restriction is mentioned, having an 'Active' IEC and GSTN details implies a registered, operational business, rather than a pre-incorporation or idea-stage startup.
News
- DGFT Extends Export Obligation Period for Advance and EPCG Authorisations Until August 31newsonair.gov.in · last month
Source: Google News aggregated
