What is EPCG - Meaning, Benefits & Purpose

What is EPCG - Meaning, Benefits & Purpose

If you are in the import and export business, you must have heard of the term “EPCG.” You probably have been wondering what EPCG means, its benefits, and how you can obtain it. Here, you can learn everything about the EPCG

EPCG stands for Export Promotion Capital Goods. EPCG, defined to promote business growth, It’s a program initiated by the Indian government to aid financial assistance to exporters who handle capital goods.

What is the EPCG scheme?

The EPCG scheme is a government program designed to promote export capital goods i.e’s goods that produce other products / final products by providing incentives and financial assistance to exporters. It provides significant advantages for the business involved with the export industry.

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What is an EPCG license

The EPCG license provides financial assistance by reducing import charges to export capital goods which produce consumer goods and services.

To opt for the EPCG license registration procedure with customs, the exporter needs to apply to the Directorate General of Foreign Trade (DGFT) with the essential documents. Once approved, the exporter can import capital goods without paying any customs duty.

Documents required for the EPCG license

To obtain the EPCG license, you will need these documents:

  • Import Export Code (IEC)
  • Pan Card
  • Import Export Code (IEC)
  • Proforma Invoice
  • Digital signature
  • GST Registration Certificate
  • Excise registration (if registered)
  • Registration certificate from the Tourism Department
  • Brochure
  • Registration and Membership Certificate (RCMC)
  • Self-Certified Original Copy of Certificate of Chartered Accountant and Chartered Engineer

What is the benefit of an EPCG license?

EPCG Benefits:The EPCG license offers exporters several perks. Under the terms of the EPCG Scheme, duty-free imports of manufactured products are allowed if the export obligation is finished in six years. It is the same as six times the tariff savings on capital goods. .Import taxes are removed, and exporters receive financial assistance under the EPCG license.

The Director General of Foreign Trade (DGFT) issued this scheme to promote export growth by providing financial assistance and incentives to exporters. The EPCG scheme benefits exporters in several ways:

  • The EPCG license offers financial assistance to exporters by removing import charges.
  • Exporters whose shipments do not exceed ₹1 crore are required to comply by providing a bank or bond guarantee. For exporters with an export value greater than ₹1 crore, the customs port is required to furnish the bond. A bank guarantee is not necessary, though.
  • To qualify for duty waivers when submitting the bill of entry, the exporter must register their EPCG license at the port of entry after obtaining it.
  • It facilitates the promotion of exports by fast-track businesses.

What is EPCG in export?

Here, the export meaning refers to sending goods to international destinations. EPCG export is designed to import capital goods for pre-production, production, and post production at an affordable price which is boosting India’s cut throat competitiveness in the Manufacturing Sector. EPCG full form in export means Export Promotion Capital Goods. EPCG export allows an exporter to import goods from foreign lands at zero customs duty.

Capital goods allowed under the EPCG scheme

Under this scheme, an exporter can export capital goods that produce the products for consumers, which are building materials, Machinery goods, including spares, dies, tools, jigs, moulds, fixtures, and other manufacturing-related products. Moreover, importers can also import second-hand capital items without considering their age.

Government Benefits for Exporters

The Indian government offers exporters a variety of benefits to promote and assist the export industry. These benefits include financial incentives, initiatives like the EPCG scheme, and streamlined customs procedures to facilitate exports.

The goal of EPCG India is to assist exporters in lowering the customs charges on Electronic/ Machinery goods, by making them affordable to produce consumer goods and services. If the merchant exporter is licensed under the EPCG scheme, the supporting manufacturer's name should be included on the EPCG shipping bill. Export obligation meaning is that exporters must export completed goods made with imported capital goods as part of the EPCG scheme.


In conclusion, the EPCG scheme plays a crucial role in promoting exports and supporting businesses engaged in international trade. By offering duty-free imports and financial incentives, the scheme contributes to the growth of the Indian economy. If you are considering applying for the EPCG license, make sure to understand and fulfill the export obligations outlined in the scheme.


1. What is EPCG Scheme?

The Export Promotion Capital Goods (EPCG) Scheme is a program by the Indian government to support and boost exports. Under this scheme, eligible exporters can import machinery and equipment at lower customs duty rates to improve their production capabilities. The idea is to make Indian exporters more competitive by giving them access to advanced technology. To benefit from the scheme, exporters must meet certain conditions and fulfill export commitments within a specified timeframe. The EPCG Scheme is managed by the Directorate General of Foreign Trade (DGFT) in India, and it encourages investments in technology to enhance the country's export capabilities.

2. What are the benefits of the EPCG scheme?

The EPCG Scheme helps Indian exporters by reducing customs duty on imported machinery, making it cheaper. It promotes global competitiveness, encourages the use of advanced technology, and contributes to infrastructure development. The scheme saves foreign exchange and is administered by the DGFT. Exporters commit to meeting export targets within a set timeframe to benefit from the scheme.

3. What is the full form of the EPCG in export?

EPCG stands for Export Promotion Capital Goods. It's a government scheme in India that aims to boost exports by providing incentives to exporters.

4. Who are eligible for Epcg?

Several types of entities are eligible for the EPCG Scheme in India, as it aims to cater to a wider range of export participants:

1. Manufacturer Exporters:
These are businesses directly involved in manufacturing and exporting goods using the imported capital goods under the scheme. They can participate with or without the support of other manufacturers.
2. Merchant Exporters:
These entities purchase finished goods from manufacturers and export them under their own brand or trading house. They must be tied to specific supporting manufacturers who utilize the imported capital goods under the EPCG Scheme.
3. Service Providers:
This category covers entities providing services related to exports, such as logistics, warehousing, quality control, or market research. They must demonstrate how the imported capital goods will be used to directly improve their export-related services.
The scheme is designed to cater to a diverse range of participants involved in export activities.

5. What is the validity of EPCG Authorisation?

The validity of an Export Promotion Capital Goods (EPCG) authorization in India is typically 24 months from the date of issue. However, the Director General of Foreign Trade (DGFT) may grant an extension of up to 12 months if the exporter provides a valid reason and fulfills certain conditions. It's important for exporters to adhere to the specified validity period and fulfill their export obligations within the prescribed time frame to fully benefit from the EPCG scheme.