Industrial Subsidies India: EPCG Scheme Post-Export Guidelines 2024

The Export Promotion Capital Goods (EPCG) scheme remains a cornerstone of industrial subsidies in India, allowing for the duty-free import of capital goods. A significant yet often overlooked aspect is the 'Post-Export EPCG Duty Credit Scrip' option. This allows exporters to pay duties in cash at the time of import and later claim a refund in the form of freely transferable scrips once the export obligation is fulfilled. This route is particularly beneficial for SMEs that have ready cash flow but want to avoid the complexities of bank guarantees and long-term monitoring by customs authorities. By opting for the post-export model, firms can mitigate the risk of hefty penalties if export targets are not met within the stipulated six-year window. ## What this means for exporters Exporters should evaluate their projected global sales before choosing between the 'Pre-import duty exemption' and 'Post-export duty credit' models. As per the Foreign Trade Policy 2023 chapters on EPCG, the post-export scrips can be used to pay basic customs duty on other imports or sold in the market for liquidity. We recommend maintaining a precise 'Export Obligation Discharge Certificate' (EODC) tracker to ensure that all documentation is submitted via the DGFT portal immediately upon completion of the mandatory export value increments.