The Export Promotion Capital Goods (EPCG) Scheme is a key initiative introduced by the Indian government to promote exports by facilitating the import of capital goods at concessional or zero customs duty rates. Under the EPCG scheme, eligible exporters can import capital goods, including machinery, equipment, and technology, without paying customs duties, provided they commit to fulfilling export obligations within a specified time frame. These export obligations typically require exporters to achieve a certain level of export earnings relative to the duty saved on the imported capital goods, thereby linking duty concessions to export performance.
The EPCG scheme plays a crucial role in enhancing the competitiveness of Indian exporters by enabling them to upgrade and modernize their production facilities, adopt advanced technologies, and improve product quality and productivity. By providing access to state-of-the-art capital goods at reduced costs, the scheme empowers exporters to enhance their manufacturing capabilities, expand their product offerings, and explore new markets, thereby driving export growth and economic development. Moreover, the scheme supports the government’s broader objectives of promoting value addition, job creation, and industrialization by incentivizing investments in export-oriented industries.
Furthermore, the EPCG scheme contributes to the integration of Indian businesses into global value chains and enhances their participation in international trade. By facilitating the import of capital goods required for export production, the scheme strengthens the linkages between domestic manufacturers and global markets, fostering collaboration, technology transfer, and knowledge sharing. Additionally, the scheme encourages the development of specialized export sectors and promotes the diversification of India’s export basket, positioning the country as a competitive player in the global marketplace. Through its targeted incentives and strategic focus, the EPCG scheme plays a pivotal role in driving export-led growth and fostering the long-term competitiveness of India’s economy.