Can Indian-sourced components purchased under EPCG Indian Purchase be duty-free?

No. Indian purchases made under EPCG do not attract duty-free benefits; they are subject to applicable GST (18% standard rate for most components) and central excise if applicable. Only imported capital goods qualify for duty concessions under the EPCG scheme. However, exporters may claim input tax credit (ITC) under GST laws if invoices are compliant.

What is the maximum value of Indian purchases allowed under EPCG authorization?

DGFT prescribes that Indian purchases typically cannot exceed 25-40% of the total EPCG authorization amount, depending on sector classification and product nature. This ratio is specified in the individual EPCG authorization certificate. Exceeding prescribed limits triggers duty recovery and penalties.

Can SEZ units or EOUs avail EPCG Indian Purchase benefits?

Yes. Special Economic Zone (SEZ) units and Export-Oriented Units (EOU) registered with the Board of Approval under the FTP 2023-28 are eligible for EPCG Indian Purchase. They must maintain separate documentation and comply with both DGFT and SEZ-specific regulations, including filing QPRs with both authorities.

What happens if I fail to achieve the export obligation linked to EPCG Indian Purchase?

Non-fulfillment of export obligations results in 'deemed duty' recovery—the customs authority reassesses and recovers applicable duties (currently nil or concessional, depending on the capital goods imported) plus 10% penalty and interest at 15% per annum. A grace period of 1-2 years is typically available to rectify shortfalls before recovery action.

How often must I file Quarterly Progress Reports (QPR) for EPCG Indian Purchase?

QPR must be filed within 30 days of each quarter-end (March 31, June 30, September 30, December 31) on the DGFT's e-SANCHIT portal. Late filing attracts penalties of INR 1,000-5,000 per instance. The QPR should clearly segregate imports of capital goods from Indian purchases and reflect cumulative export achievement.

EPCG Indian Purchase

EPCG Indian Purchase enables duty-free capital goods imports with domestic sourcing benefits. Understand eligibility, application process, compliance requirements for Indian exporters.

Verify IEC validity, RCMC registration status, and Customs compliance history through DGFT and GST portals
Identify eligible Indian suppliers with valid GST, business licenses, and sector-specific certifications (FSSAI, BIS, etc.)
Prepare itemized technical specifications and obtain competitive quotations from minimum two domestic suppliers
Submit EPCG authorization application on DGFT's e-SANCHIT portal with detailed Indian Purchase schedule and comparative quotations
Receive EPCG Authorization Certificate from DGFT, then register with Chief Commissioner of Customs before import/purchase transactions

Google VerifiedBusiness

500+Export Clients Served

End-to-EndEXIM Support

Book a Free Consultation Call

Share your details — our EXIM expert will call you back.

100% free, no obligation

We respond within 2 business hours

Dedicated expert for your service

What is EPCG Indian Purchase?

EPCG Indian Purchase refers to the procurement of goods and services from domestic Indian suppliers under the Export Promotion Capital Goods (EPCG) scheme, as notified by the Directorate General of Foreign Trade (DGFT) under the Foreign Trade Policy 2023-28. When an exporter imports capital goods under EPCG authorization, they may simultaneously source certain components, raw materials, and services from Indian manufacturers and suppliers, subject to specific conditions outlined in the scheme's regulations.

This mechanism encourages technology transfer and domestic value addition while maintaining the core objective of the EPCG scheme—enabling exporters to import capital equipment at concessional duty rates (currently nil or reduced tariffs under Schedule I of the Customs Tariff Act, 1975) against an export obligation. The Indian Purchase component strengthens the domestic supply chain and allows Indian vendors to participate in export-oriented manufacturing ecosystems.

Pricing

Package	Price	Details
Standard	On request	Including document prep

Process

📋
Verify IEC validity, RCMC registration status, and Customs compliance history through DGFT and GST portals
🔍
Identify eligible Indian suppliers with valid GST, business licenses, and sector-specific certifications (FSSAI, BIS, etc.)
📝
Prepare itemized technical specifications and obtain competitive quotations from minimum two domestic suppliers
✅
Submit EPCG authorization application on DGFT's e-SANCHIT portal with detailed Indian Purchase schedule and comparative quotations
📤
Receive EPCG Authorization Certificate from DGFT, then register with Chief Commissioner of Customs before import/purchase transactions
🏆
Arrange Bank Guarantee for 50% of CIF value and submit to Customs; commence authorized capital goods imports and domestic purchases
🤝
File Quarterly Progress Reports within 30 days of each quarter-end detailing all imports, Indian purchases, and export performance
📞
Maintain complete documentation (invoices, bills of lading, supplier certs) for 5 years post-authorization; achieve 100% export obligation within validity period

Documents Required

Valid Importer-Exporter Code (IEC) certificate issued by Regional Authority under the Customs Act, 1962
Active Registration-cum-Membership Certificate (RCMC) from relevant Export Promotion Council or authorized body, with minimum 12-month validity
Detailed technical specifications and drawings of capital goods and Indian-sourced components
Comparative price quotations from minimum two certified Indian suppliers (GST-registered and industry-license compliant)
Supplier certification documents: GST Registration, Business License, Certificate of Incorporation, FSSAI/BIS/sector-specific approvals as applicable
Bank Guarantee document (50% of CIF value) issued by scheduled bank or NBFC in prescribed DGFT format
Three-year financial statements and audited balance sheets for existing exporters; Incorporation Certificate for new entities
Undertaking on official letterhead confirming compliance with Customs Act, 1962, and commitment to fulfill export obligations within prescribed timelines

Frequently Asked Questions

Related Services

By category

||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

Ready to get started?

Get a free consultation and custom quote.

Book Free Consultation

EPCG Indian Purchase

EPCG Indian Purchase enables duty-free capital goods imports with domestic sourcing benefits. Understand eligibility, application process, compliance requirements for Indian exporters.

Verify IEC validity, RCMC registration status, and Customs compliance history through DGFT and GST portals

Identify eligible Indian suppliers with valid GST, business licenses, and sector-specific certifications (FSSAI, BIS, etc.)

Prepare itemized technical specifications and obtain competitive quotations from minimum two domestic suppliers

Submit EPCG authorization application on DGFT's e-SANCHIT portal with detailed Indian Purchase schedule and comparative quotations

Receive EPCG Authorization Certificate from DGFT, then register with Chief Commissioner of Customs before import/purchase transactions

Google VerifiedBusiness

500+Export Clients Served

End-to-EndEXIM Support

What is EPCG Indian Purchase?

Package

Price

Details

Standard

On request

Including document prep

Process

📋

Verify IEC validity, RCMC registration status, and Customs compliance history through DGFT and GST portals

🔍

Identify eligible Indian suppliers with valid GST, business licenses, and sector-specific certifications (FSSAI, BIS, etc.)

📝

Prepare itemized technical specifications and obtain competitive quotations from minimum two domestic suppliers

✅

Submit EPCG authorization application on DGFT's e-SANCHIT portal with detailed Indian Purchase schedule and comparative quotations

📤

Receive EPCG Authorization Certificate from DGFT, then register with Chief Commissioner of Customs before import/purchase transactions

🏆

Arrange Bank Guarantee for 50% of CIF value and submit to Customs; commence authorized capital goods imports and domestic purchases

🤝

File Quarterly Progress Reports within 30 days of each quarter-end detailing all imports, Indian purchases, and export performance

📞

Maintain complete documentation (invoices, bills of lading, supplier certs) for 5 years post-authorization; achieve 100% export obligation within validity period

Documents Required

Valid Importer-Exporter Code (IEC) certificate issued by Regional Authority under the Customs Act, 1962

Active Registration-cum-Membership Certificate (RCMC) from relevant Export Promotion Council or authorized body, with minimum 12-month validity

Detailed technical specifications and drawings of capital goods and Indian-sourced components

Comparative price quotations from minimum two certified Indian suppliers (GST-registered and industry-license compliant)

Supplier certification documents: GST Registration, Business License, Certificate of Incorporation, FSSAI/BIS/sector-specific approvals as applicable

Bank Guarantee document (50% of CIF value) issued by scheduled bank or NBFC in prescribed DGFT format

Three-year financial statements and audited balance sheets for existing exporters; Incorporation Certificate for new entities

Undertaking on official letterhead confirming compliance with Customs Act, 1962, and commitment to fulfill export obligations within prescribed timelines

Frequently Asked Questions