EPCG Scheme in India: Eligibility, Benefits, and Application Process Explained

India’s export sector plays a crucial role in strengthening the country’s economy and global trade presence. To encourage exporters and boost manufacturing capabilities, the Government of India has introduced several export promotion schemes. One of the most significant initiatives is the EPCG scheme (Export Promotion Capital Goods Scheme), which enables exporters to import capital goods at reduced or zero customs duty in exchange for fulfilling export obligations.

For manufacturers and exporters looking to expand production capacity, improve technology, and reduce costs, the EPCG scheme offers a powerful opportunity. In this detailed guide, we will explain the eligibility criteria, benefits, and application process of the scheme along with the role of EPCG Consultants in ensuring smooth compliance.

What is the EPCG Scheme?

The EPCG scheme is a flagship export promotion initiative introduced under the Foreign Trade Policy (FTP) of India by the Directorate General of Foreign Trade (DGFT). The primary objective of the scheme is to facilitate the import of capital goods required for producing high-quality export products.

Under this scheme, businesses can import machinery, equipment, and other capital goods at zero or concessional customs duty by obtaining an EPCG License from DGFT. In return, the importer must fulfill a specified export obligation within a defined time period.

Capital goods imported under the EPCG scheme may include:

• Manufacturing machinery

• Production equipment

• Packaging machinery

• Quality testing instruments

• Computer systems and software related to production

• Spare parts, tools, and dies

  
  

The scheme enables Indian manufacturers to adopt advanced technology and compete more effectively in global markets.

Latest Updates on the EPCG Scheme (2026)

As per the latest Foreign Trade Policy updates and DGFT notifications applicable in 2026, the EPCG scheme continues to offer zero basic customs duty on capital goods imports. The scheme remains an important tool to support India’s manufacturing and export competitiveness.

Key highlights of the updated framework include:

• Zero customs duty import of capital goods under the EPCG License.

• Export obligation equivalent to six times the duty saved on imports.

• Export obligation to be completed within six years.

• Online application and tracking through the DGFT portal.

• Integration with ICEGATE and customs systems for better monitoring.

  
  

These updates are aligned with India’s broader objective of increasing exports and strengthening domestic manufacturing under initiatives such as “Make in India” and “Atmanirbhar Bharat”.

Eligibility for the EPCG Scheme

The EPCG scheme is available to a wide range of businesses involved in export activities. The following entities are eligible to apply:

• Manufacturer exporters

• Merchant exporters tied to supporting manufacturers

• Service providers exporting services

• Manufacturer cum merchant exporters

• Export-oriented units and service exporters

  
  

Applicants must possess a valid Import Export Code (IEC) issued by DGFT. Additionally, the capital goods imported under the scheme must be used for producing goods or services that will be exported.

Businesses must also maintain proper records of imports, production, and exports to demonstrate compliance with the conditions of the EPCG License.

Export Obligation under EPCG

One of the most important aspects of the EPCG scheme is the export obligation requirement. The importer must export goods or services worth a multiple of the duty saved on imported capital goods.

The key export obligation conditions include:

• Export obligation is generally six times the duty saved.

• The obligation must be fulfilled within six years from the issue date of the EPCG certificate.

• Exports must be made directly or through third-party exporters.

• Export products must be manufactured using the imported capital goods.

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Failure to fulfill the export obligation may result in payment of the saved duty along with interest and penalties.

Benefits of the EPCG Scheme

The EPCG scheme offers several advantages for Indian exporters and manufacturers aiming to improve their competitiveness.

Reduction in Import Cost

One of the biggest benefits is the zero or concessional customs duty on capital goods imports. This significantly reduces the cost of acquiring advanced machinery.

Access to Advanced Technology

Companies can import modern manufacturing equipment, enabling them to improve product quality and productivity.

Improved Global Competitiveness

With access to better technology and reduced costs, businesses can compete more effectively in international markets.

Expansion of Export Capacity

The scheme encourages businesses to increase production and expand exports by investing in modern infrastructure.

Boost to Domestic Manufacturing

By supporting manufacturers with duty-free machinery imports, the EPCG scheme strengthens India’s industrial growth and export ecosystem.

Documents Required for EPCG License

To obtain an EPCG License, applicants must submit several documents through the DGFT portal. These typically include:

• Import Export Code (IEC) certificate

• PAN card of the applicant entity

• GST registration certificate

• Digital signature certificate

• Details of capital goods to be imported

• Chartered Engineer certificate for machinery valuation

• Proforma invoice from the supplier

• Authorization letter if applying through consultants

  
  

Proper documentation is essential to avoid delays or rejection of the application.

Application Process for EPCG License

The application process for obtaining an EPCG License has become largely digital, making it easier for businesses to apply and track approvals.

Step 1: Prepare Required Documents

The first step is to gather all relevant documents including IEC details, machinery specifications, and supplier invoices.

Step 2: Online Application through DGFT Portal

Applicants must submit the online application through the DGFT website along with the required information about capital goods and export plans.

Step 3: Application Review by DGFT

DGFT authorities review the application, verify documentation, and assess eligibility for the EPCG certificate.

Step 4: Issuance of EPCG License

Once the application is approved, the EPCG License is issued electronically. This allows the importer to proceed with duty-free import of capital goods.

Step 5: Import of Capital Goods

The importer can then import the machinery and equipment by presenting the EPCG certificate to customs authorities.

Step 6: Fulfillment of Export Obligation

After installation of the machinery, the company must fulfill the export obligation within the prescribed time period and maintain proper export records.

Role of EPCG Consultants

Although the application process is online, many businesses prefer working with experienced EPCG Consultants due to the technical and compliance-related aspects of the scheme.

Professional EPCG Consultants assist companies with:

• Eligibility assessment for the EPCG scheme

• Preparation and submission of the application

• Documentation and compliance management

• Export obligation tracking and reporting

• Handling DGFT queries and approvals

• Closure of the EPCG certificate after completion of export obligations

Working with experienced consultants helps reduce errors, ensure compliance, and speed up the approval process.

Why Businesses Choose Professional EPCG Support

Many companies face challenges while applying for the EPCG scheme, including complex documentation, export obligation calculations, and regulatory updates. Professional guidance ensures that businesses comply with DGFT regulations and avoid penalties.

Organizations like Exim Advisory provide expert assistance for obtaining the EPCG License, managing documentation, and ensuring successful completion of export obligations. With professional support, exporters can focus on expanding their business while maintaining regulatory compliance.

Conclusion

The EPCG scheme remains one of the most powerful export promotion initiatives introduced by the Government of India. By allowing duty-free import of capital goods, the scheme helps Indian manufacturers adopt modern technology, expand production capacity, and compete in global markets.

With benefits such as reduced import costs, improved manufacturing capabilities, and increased export potential, the EPCG scheme plays a critical role in supporting India’s export-driven growth strategy.

However, businesses must carefully comply with the export obligation requirements associated with the EPCG License. Proper documentation, timely reporting, and professional assistance from experienced EPCG Consultants can help companies fully leverage the benefits of the scheme.

For exporters seeking reliable guidance, Exim Advisory offers expert support in obtaining the EPCG certificate, ensuring regulatory compliance, and helping businesses maximize the advantages of this valuable export promotion program.