Export Promotion Capital Goods Scheme – EPCG

UPSC Reference: Economy

What is EPCG?

The Export Promotion Capital Goods Scheme facilitates import of capital goods for producing goods and services intended for export.

Key Facts

  • Administered by: Directorate General of Foreign Trade (DGFT).

  • Governed under India's Foreign Trade Policy.

  • Allows eligible capital goods to be imported at zero customs duty, subject to prescribed export obligations.

  • Covers:

    • Manufacturer exporters

    • Merchant exporters linked with supporting manufacturers

    • Service providers

  • Capital goods may be used for:

    • Pre-production

    • Production

    • Post-production

The government recently simplified the compliance process by removing the requirement for physical duty-payment challans while applying for certain Export Obligation Discharge Certificates.

Key Pointer

EPCG → DGFT → Capital goods → Zero customs duty → Export obligation