EPCG Licence (Export Promotion Capital Goods)
An EPCG authorisation lets you import machinery and other capital goods at zero customs duty, in return for exports worth six times the duty saved within six years. We check eligibility, file ANF-5A with the DGFT Regional Authority and track your export obligation through to the discharge certificate.
What it is
The Export Promotion Capital Goods (EPCG) scheme helps exporters buy the machines that make their export goods. You import the capital goods without paying customs duty. In return, you take on an export obligation: you must export enough to earn back six times the duty you saved.
The scheme sits in Chapter 5 of both the Foreign Trade Policy 2023 and the Handbook of Procedures 2023. Para 5.01 of the policy allows import of capital goods for pre-production, production and post-production at zero customs duty, except items on the negative list in Appendix 5F. The export obligation is six times the duties, taxes and cess saved, to be met in six years. The authorisation is valid for imports for 24 months from the date of issue. You apply online on the DGFT portal in form ANF-5A.
Who it applies to
Manufacturer exporters
Factories adding or upgrading export lines, with or without supporting manufacturers.
Merchant exporters tied to a manufacturer
Traders can use the scheme when they are tied to a supporting manufacturer who installs and uses the machines.
Service providers
Service exporters, and providers certified as a Common Service Provider under para 5.02(b), can import capital goods used to render services.
Why it matters
You save cash up front
Duty on imported machinery can be a large share of the project cost. Under EPCG, that money stays in your business.
Your export price gets sharper
Lower capital cost per unit lets you quote better prices to foreign buyers.
Concessions for some sectors and regions
Green technology products carry a specific obligation of 75% of the normal level (para 5.10). Units in the North East, Jammu and Kashmir and Ladakh carry 25% (para 5.11).
Documents required
Exporter registrations
- Import Export Code (IEC), updated for the year
- Valid RCMC from the relevant export promotion council
- DSC of the authorised signatory
- GST registration and PAN
Project details
- Proforma invoice or quotation for each capital good
- Technical description, HS codes and CIF value
- Details of the factory or premises where the goods will be installed
- Supporting manufacturer details, if you are a merchant exporter
Export record
- Export figures for the last three licensing years
- Products to be exported using the capital goods
- Shipping bills and bank realisation records for later EO reporting
How the export obligation works
Two obligations run side by side.
| Obligation | What it means | Rule |
|---|---|---|
| Specific export obligation | Exports equal to 6 times the duties, taxes and cess saved, within 6 years | FTP para 5.01(b) |
| Block-wise fulfilment | At least 50% in years 1–4; the balance in years 5–6 | HBP para 5.13(a) |
| Average export obligation | Over and above your average exports of the preceding three licensing years, met every financial year | FTP para 5.04(c) |
| Green technology products | Specific obligation at 75% of the normal level | FTP para 5.10 |
| North East, J&K and Ladakh units | Specific obligation at 25% of the normal level | FTP para 5.11 |
Picture a Faridabad auto-component unit importing a CNC line. If the duty saved is ₹50 lakh, the specific obligation is exports worth ₹3 crore in six years. At least ₹1.5 crore must be shipped in the first four years. These exports come on top of your normal average, so plan your order book before you import.
How it works
Run the numbers before you order
We confirm the goods are not in Appendix 5F, work out the duty saved and both obligations, and test them against your export plan.
Line up IEC and RCMC
Para 2.57(a) of the FTP requires an RCMC for any authorisation. No RCMC yet? We complete your RCMC registration with the right council first.
File ANF-5A with the Regional Authority
We prepare the application with the capital goods list, values and HS codes, sign it with your DSC and file it on the DGFT portal.
Import and clear with customs
Imports must land within 24 months of issue. Here is the catch: customs wants a bond, and a bank guarantee where required. We help you set these up.
Submit the installation certificate
Within six months of completing the import, you file a certificate from the jurisdictional customs authority or an independent chartered engineer confirming installation.
Track exports and close with EODC
Each year we log shipping bills and realisations against the authorisation. At the end, we apply in ANF-5B for the Export Obligation Discharge Certificate.
Timelines
Import within 24 months
The authorisation is valid for import for 24 months from the date of issue (FTP para 5.01(d)).
Installation certificate within 6 months
Due within six months of completing the import. A one-time extension of 12 months is possible on a fee of ₹5,000 (HBP para 5.04(a)).
Export obligation within 6 years
50% in the first four years and the balance by the end of year six. Two one-year extensions may be allowed on a composition fee of 2% of the proportionate duty saved, minimum ₹10,000 (HBP para 5.16(b)).
What happens if you miss the export obligation
You pay the saved duty with interest
Customs duty on the unfulfilled portion becomes payable with interest, as customs prescribes (HBP para 5.24).
Action under the FT(D&R) Act
Default can also lead to action under the Foreign Trade (Development and Regulation) Act, 1992.
Your bond and guarantee stay open
Until the EODC is issued, the customs bond and any bank guarantee remain live against you.
Frequently asked questions
What is an EPCG licence?
An EPCG licence is an authorisation from DGFT to import capital goods at zero customs duty, against an export obligation. Under para 5.01 of the Foreign Trade Policy 2023, you must export goods worth six times the duties, taxes and cess saved, within six years. The authorisation is valid for imports for 24 months. We work out the numbers with you first, so you know the commitment before you sign up.
What is the export obligation under EPCG?
It is six times the duties, taxes and cess saved on the capital goods, to be met within six years of issue. At least 50% must be met in the first four years and the balance in years five and six, under HBP para 5.13(a). You must also keep up your average export obligation every financial year. We track both against your shipping bills, so nothing is missed.
What is the average export obligation?
It is the average of your exports in the preceding three licensing years, which you must maintain every year on top of the EPCG obligation. Para 5.04(c) of FTP 2023 says the specific obligation is over and above this average. We calculate your average from your past export data before you apply, so the target is clear from day one.
Which capital goods can I import under EPCG?
You can import capital goods for pre-production, production and post-production, except items on the negative list in Appendix 5F. Before filing, check every item against that list and confirm it will be used to make the goods you plan to export. We review the quotation line by line, so ineligible items are dropped before the application goes in.
What is the installation certificate and who issues it?
It is proof that the imported capital goods have been installed at your premises. Under HBP para 5.04(a), it must be submitted within six months of completing the import, from the jurisdictional customs authority or an independent chartered engineer. A one-time extension of 12 months is available on a ₹5,000 fee. We coordinate with the engineer and file it on time.
Can the export obligation period be extended?
Yes. Para 5.16(b) of the Handbook allows two extensions of one year each, from the date of expiry. Each needs a composition fee of 2% of the proportionate duty saved on the unfulfilled obligation, with a minimum of ₹10,000. Apply before the period ends. If your order book has slipped, we file the extension in time and plan the remaining exports with you.
What happens if I cannot meet the export obligation?
You pay customs duty on the unfulfilled portion, with interest, as customs prescribes. HBP para 5.24 also allows action under the Foreign Trade (Development and Regulation) Act, 1992. In practice, do not wait for the deadline. Interest keeps running on the shortfall, so settling it early usually costs less. We help you compare an extension with paying up and closing.
How do I close an EPCG authorisation?
You apply in form ANF-5B for the Export Obligation Discharge Certificate (EODC), with the documents it lists. Under HBP para 5.20(a), the Regional Authority ordinarily decides within 30 days. The EODC releases your customs bond and bank guarantee. We keep your export records ready year by year, so the closure file is complete when you reach the target.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Government charges along the way: ₹5,000 to extend the installation-certificate deadline by 12 months, and 2% of the proportionate duty saved (minimum ₹10,000) for each extension of the export obligation period. Check the current DGFT application fee on the DGFT portal when you file ANF-5A.
Ready to begin?
Send us the machinery quotation and your last three years’ export figures, and we will tell you what your EPCG obligation looks like before you apply.