EPCG.

EPCG is a useful duty-saving route for exporters and manufacturers who need capital goods but are willing to commit to export performance. In India, it allows import of eligible capital goods at zero customs duty, subject to fulfilling a defined export obligation within the prescribed period.

What EPCG does
Under EPCG, you can import capital goods for pre-production, production, and post-production use at zero customs duty, and in the case of physical exports, the scheme also provides exemption from IGST and Compensation Cess as per the relevant DGFT/Customs notification. The objective is to help firms modernize technology, improve quality, and stay competitive globally.

Who can use it
The scheme is meant for:

Manufacturer exporters, with or without supporting manufacturers.

Merchant exporters tied to supporting manufacturers.

Service providers.

This is especially attractive if you are upgrading machinery, expanding capacity, or replacing older equipment to support export growth.

Export obligation
The core condition is export obligation: exports must be achieved to the extent prescribed under the authorization. Current DGFT references commonly state an export obligation of six times the duty saved, to be fulfilled over six years from the date of authorization, with progress generally expected in two blocks of three years / first four years and remaining two years, depending on the applicable DGFT framework and authorization terms.

Also, export proceeds must generally be realized in free foreign currency, though deemed exports and some SEZ-related supplies may count under specified conditions.

When it is worth using
EPCG is usually most valuable when:

The machinery is expensive and duty saving is significant.

You have confirmed export orders or strong export pipeline.

The new machine directly improves productivity, quality, or compliance.

Your margin can absorb the obligation structure comfortably

Simply ExIm thru Sow Exim.
91 9944430392
ceo@sowexim.com
www.sowexim.com