EPCG Scheme

Customs

Export Promotion Capital Goods scheme — duty-free import of capital goods against an export obligation.

Sources

1. DGFT — Foreign Trade Policy 2023, Chapter 5: Export Promotion Capital Goods Scheme content.dgft.gov.in accessed 22 September 2026

Foreign Trade Policy 2023 states the scheme’s objective as “to facilitate import of capital goods for producing quality goods and services and enhance India’s manufacturing competitiveness”, allowing capital goods to be imported at “zero customs duty”. The export obligation is “equivalent to 6 times of duties, taxes and cess saved on capital goods, to be fulfilled in 6 years reckoned from date of issue of Authorisation”.

Corrected on 22 September 2026. This entry previously gave the export obligation as six times the CIF value of the capital goods. The policy text measures it against the duties, taxes and cess saved, which is a fraction of CIF value — so the earlier wording overstated the obligation many times over. The answer above has been corrected to match the policy.

Common questions

What is the EPCG scheme?

Export Promotion Capital Goods (EPCG) scheme allows Indian exporters to import capital goods (machinery, equipment) at 0% customs duty, subject to an export obligation of 6 times the duties, taxes and cess saved on the imported capital goods over 6 years. Managed by DGFT. Ideal for Indian manufacturers investing in EU-standard machinery to improve export product quality.

Related terms

• Advance Authorisation
• Anti-Dumping Duty
• ATA Carnet
• Authorised Economic Operator
• Bill of Entry
• Binding Tariff Information

From the AJG lexicon archive (July 2026).