DGFT Introduces Major Reforms to Export Promotion Capital Goods Scheme to Boost Export Efficiency

Following the announcement of the new Foreign Trade Policy in April 2023, DGFT has been focused on modernizing its systems to increase automation.

The Directorate General of Foreign Trade (DGFT) has unveiled substantial enhancements to the Export Promotion Capital Goods (EPCG) Scheme through Public Notice No. 15, issued on July 25, 2024. These reforms are designed to simplify procedures, lower transaction costs, and encourage automation, reflecting the government's commitment to fostering a more business-friendly environment and boosting India’s manufacturing competitiveness.

Key Changes to the EPCG Scheme:

Extended Submission Period: Exporters now have more time to submit Installation Certificates for imported capital goods. This extension alleviates pressure on businesses, allowing them to concentrate on production and export activities without the added burden of tight deadlines.

Simplified Fee Structure: The scheme introduces a more straightforward and reduced composition fee for extending the Export Obligation (EO) period. This change aims to minimize manual intervention, streamline compliance, and accelerate service delivery.

Uniform Composition Fee for PRC Decisions: All Policy Relaxation Committee (PRC) decisions related to Export Obligation extensions and the regularization of exports will now be implemented with a uniform composition fee. This adjustment simplifies the process and improves system efficiency.

Benefits for Exporters:

These updates facilitate easier compliance with regulations, cutting down the time and effort needed to meet DGFT requirements. By expanding automated, rule-based processes, DGFT aims to reduce human intervention, mitigate risks, and enhance overall efficiency in trade facilitation.

Commitment to Modernization and Efficiency:

Following the announcement of the new Foreign Trade Policy in April 2023, DGFT has been focused on modernizing its systems to increase automation. Recent initiatives include automating the authorisation issuance process, ad-hoc norms fixation under Advance Authorisation, export obligation extensions, and automatic status holder certificate issuance. Looking ahead, DGFT plans to further streamline processes with minimal human intervention, aiming to facilitate smoother trade and industry operations.

These reforms are significant steps toward creating a more efficient and competitive trading environment for India, supporting the broader goal of enhancing the country's global market position.