The Export Promotion Capital Goods (EPCG) scheme is a vital initiative introduced by the Government of India to promote the export of goods manufactured domestically. Under this scheme, eligible exporters are granted licenses to import capital goods at concessional rates or even duty-free, subject to fulfilling certain export obligations. This scheme serves as an essential Export License for businesses aiming to enhance their export potential.
Here's some detailed information about the EPCG scheme:
The objective of EPCG Scheme
The primary objective of the EPCG scheme is to facilitate the import of capital goods for the enhancement of productivity and quality of products for export-oriented units or industries. It aims to make Indian exports globally competitive by enabling access to modern technology and equipment.
Eligibility Criteria for EPCG Scheme
To qualify for an EPCG license, an exporter must meet specific eligibility criteria set by the Directorate General of Foreign Trade (DGFT). Generally, manufacturers-exporters, merchant-exporters tied to supporting manufacturers, and service providers who are designated service providers under the Service Providers Rules of the Foreign Trade Policy are eligible under the Epcg Scheme.
Export Obligation Under EPCG Scheme
Upon obtaining an EPCG license, the exporter is obligated to fulfill certain export targets within a specified period, typically ranging from 6 to 8 years. The export obligation is calculated as a certain multiple (usually 6 times) of the duty saved on the imported capital goods under the Export Promotion Capital Goods (EPCG) License.
Benefits:
●Duty Concession: Import of capital goods under the EPCG scheme allows for the concession or exemption of customs duty, including additional duties and taxes.
●Flexibility: Exporters have the flexibility to source capital goods from anywhere globally.
●Technological Upgradation: Access to modern and technologically advanced equipment facilitates the upgradation of manufacturing processes, enhancing competitiveness in the global market.
●Capital Goods: The scheme covers the import of capital goods such as machinery, equipment, and components, essential for enhancing production capabilities.
Application Process for EPCG License
Interested exporters can apply for an EPCG license through the online portal of DGFT. The application typically requires the submission of relevant documents, including business details, export performance, and a commitment to fulfil export obligations.
Export Promotion Capital Goods (EPCG) scheme: Conclusion
The Export Promotion Capital Goods (EPCG) scheme plays a crucial role in boosting India's export potential by facilitating access to modern technology and equipment. By incentivizing the import of capital goods, it encourages exporters to enhance productivity and quality standards, thereby strengthening India's position in the global market. The EPCG scheme, with its benefits as a comprehensive Export License, continues to support the growth of Indian exports globally.
