Export Promotion Capital Goods Scheme (EPCG)

The Export Promotion Capital Goods (EPCG) Scheme is run by the Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry. It lets exporters import capital goods — equipment needed for manufacturing and for delivering services — without paying customs duty. For physical exports, the exemption also covers Integrated Goods and Services Tax (IGST) and Compensation Cess. This lowers the initial outlay that export-oriented units must make on technology and infrastructure. Capital goods may also be sourced from domestic suppliers, which supports Indian manufacturing and supply chains.

Under the scheme, capital goods take in machinery, computer systems and the software built into such machines, plus spares, moulds, dies, jigs, fixtures, tools, refractories and catalysts that are essential to production. Coverage of this breadth gives exporters access to the equipment they need to raise production efficiency and compete better in overseas markets. The aim is to sharpen the competitiveness of Indian goods and services by helping exporters modernise their production facilities with better machinery and technology, which in turn supports economic growth and a larger Indian share of international trade.

In return for these benefits, beneficiaries accept an Export Obligation (EO), normally six times the duties, taxes and cess saved on the imported capital goods, to be met within six years. The obligation ties the duty benefit to a rise in exports, so the scheme's incentives line up with national trade objectives. Manufacturer exporters, merchant exporters working with supporting manufacturers, and service providers can all apply, which makes the scheme usable across sectors seeking to grow their international presence.

- **Step 1: Reach the DGFT Portal** Go to the official DGFT website (www.dgft.gov.in), then use the 'Services' menu to select 'EPCG'.

- **Step 2: Sign in and Submit Your Application** Access the DGFT Customer Portal with valid login credentials. Check that your 'Active' IEC is linked and that e-Sign and DSC features are switched on. Then apply for an EPCG file number by completing the required application form online, supplying particulars of your IEC, GSTN, and the capital goods you plan to import or procure.

The Directorate General of Foreign Trade (DGFT) examines each application against the Foreign Trade Policy (FTP) and the conditions attached to the relevant scheme. Checks cover the applicant's IEC status, GSTN particulars, and the type of capital goods proposed for import. An application is approved once every eligibility criterion is verified and the stated export obligations are met. Where restricted items are involved in import or export, the Exim Facilitation Committee (EFC) at DGFT Headquarters must also grant its approval.