EPCG (Export Promotion Capital Goods) scheme lets Indian exporters import capital goods at zero customs duty, subject to an export obligation of 6 times the duty saved within 6 years. Under Chapter 5 of the Foreign Trade Policy 2023, it covers machinery, equipment, and technology needed for export manufacturing — administered by the Directorate General of Foreign Trade (DGFT).
For any manufacturer-exporter or service exporter looking to upgrade production capacity, EPCG is one of the most powerful tools in India's foreign trade policy toolkit.
What Is the EPCG Scheme and How Does It Work?
EPCG stands for Export Promotion Capital Goods. It is a duty exemption scheme governed by Chapter 5 of the Foreign Trade Policy (FTP) 2023, administered by DGFT Regional Authorities across India.
The core mechanics are straightforward:
- You import capital goods (machinery, equipment, technology) at 0% Basic Customs Duty
- In return, you commit to an export obligation of 6 times the duty saved, to be fulfilled over 6 years from the date of authorization
- The export obligation must be over and above your average exports from the preceding 3 years
Who Is Eligible for EPCG?
The scheme is open to a broad category of exporters: Manufacturer exporters, Merchant exporters, and Service exporters (hotels, software companies, etc.).
How to Apply for EPCG Authorization: Step by Step
- Ensure prerequisites (IEC, RCMC, GST) are in order.
- Calculate proposed export obligation.
- Apply online on the DGFT portal (dgft.gov.in).
- Upload required documents (CA certificate, proforma invoice).
- Install and track exports by block year.
Common Mistakes to Avoid
- Missing block-year obligation splits (50% in first 4 years).
- Wrong HSN classification of capital goods.
- Selling machinery before obligation fulfillment.
Note: This article was published as part of the Eximoz compliance series 2026.