How to Claim EPCG in 2026: Step by Step Guide for Indian Exporters

Last updated: April 2026. EPCG, the Export Promotion Capital Goods scheme, remains one of the most underused tools in India’s export toolkit. Used right, it lets you import capital equipment at zero Basic Customs Duty against a future export obligation. Used wrong, it turns into a compliance trap that can cost you more than the duty savings. This guide walks you through the 2026 version of the process, including the recent DGFT relief measures and the procedural reforms under FTP 2023.

What EPCG is, in one minute

The Export Promotion Capital Goods scheme, governed by Chapter 5 of the Handbook of Procedures 2023, allows manufacturer and merchant exporters to import capital goods at zero Basic Customs Duty. In exchange, you commit to an Export Obligation equal to six times the duty saved, to be fulfilled within six years from the date of issue of the authorisation. The scheme covers pre-production, production, and post-production equipment. It also allows you to procure domestically against deemed export benefits. Detailed scheme information is available on the DGFT EPCG portal.

Translation for a first-time exporter: you import a machine worth Rs 1 crore on which the BCD saved is Rs 7.5 lakh. Your export obligation is Rs 45 lakh of exports (six times Rs 7.5 lakh) to be done in six years using that machine. If you already export Rs 10 crore a year, hitting Rs 45 lakh of incremental exports is trivial. If you are scaling up from zero, the EO becomes a real pressure point.

What is new in EPCG for 2026

Automatic EO extension till 31 August 2026

On 6 March 2026, the DGFT issued Public Notice No. 51/2025-26 extending the Export Obligation period for EPCG and Advance Authorisations expiring between 1 March 2026 and 31 May 2026. The new deadline is 31 August 2026. The extension is automatic. You do not have to apply, pay a composition fee, or request an amendment. The India Briefing coverage has the full breakdown.

Average Export Obligation relief for declining sectors

On 26 February 2026, the DGFT released Policy Circular No. 10/2025-26. Under Para 5.17(a) of the HBP 2023, sectors or product groups where total exports declined by more than 5 percent in FY 2024-25 compared to FY 2023-24 get a proportional reduction in their Annual Average EO. The official notification annexes the list of eligible sectors. Regional Authorities have been instructed to refix the Annual Average EO accordingly. If you hold an EPCG in a declining sector, check whether your product group is on the annexed list.

Simplified Chapter 5 procedures

The September 2024 amendment to Chapter 5 of HBP 2023 continues to apply in 2026. It simplified documentation, reduced compliance burden, and accelerated processing timelines. Practical effect: fresh EPCG authorisations now move faster through Regional Authorities, usually within 15 to 30 days.

Step by step: how to claim EPCG in 2026

Step 1. Confirm you are eligible

You need a live Importer Exporter Code and a valid RCMC. You must be a manufacturer exporter (with your own or a supporting unit), a merchant exporter tied to a supporting manufacturer, or a service provider with export earnings. Trading companies without a manufacturing nexus cannot claim EPCG.

Step 2. Pin down the capital goods list

Prepare a detailed list of the capital goods you want to import. Include specifications, country of origin, suppliers, CIF value, and most importantly, the nexus to your export product. Nexus means the equipment is used in manufacturing the products you will export. Spares, moulds, dies, jigs, fixtures, tools, catalysts for initial charge and one subsequent charge are also eligible. Software forming part of the capital goods setup is covered.

Step 3. Get a Chartered Engineer Certificate

A Chartered Engineer (Mechanical, Production, or whichever discipline matches your equipment) must certify the capital goods, their nexus with the export product, installed capacity, and plant layout. This document is foundational. A weak or generic CE certificate is the number one reason EPCG applications face Deficiency Letters from Regional Authorities.

Step 4. File ANF-5A online on the DGFT portal

Log in to the DGFT e-services portal with your IEC credentials and Class 3 DSC. Navigate to Services, then EPCG, then New Application. Fill ANF-5A with the following:

Applicant details linked to IEC
Capital goods list with ITC HS codes, CIF value, and duty calculation
Details of the product that will be exported against this EPCG
Existing Average Export Obligation calculation (average exports of the same product in the preceding three years)
RCMC details
Supporting manufacturer details if merchant exporter
Declaration on actual user condition

Step 5. Attach supporting documents

Upload the following via the portal upload module: IEC certificate, RCMC, GST registration, Chartered Engineer Certificate, proforma invoice from the overseas supplier, statement of EO calculation, CA certificate where required, and Import Export declaration. File size limits apply. Keep everything under 2 MB per file if possible.

Step 6. Pay the DGFT application fee

The application fee is calculated on the duty value of the authorisation. Pay online via the DGFT payment gateway. A payment challan is generated and auto-attached to the application.

Step 7. Sign and submit with DSC

Digitally sign the application with your Class 3 Digital Signature Certificate. Submit. You will receive an acknowledgement number. Track status under Submitted Applications on your DGFT dashboard.

Step 8. Regional Authority review and EPCG Authorisation issue

The Regional Authority (RA) reviews the application. Typical processing time under FTP 2023 is 15 to 30 days for straightforward cases. Complex cases involving policy relaxation or non-standard capital goods may go to the EPCG Committee and take longer. If there are queries, the RA issues a Deficiency Letter. Under Trade Notice No. 20/2019-20, all deficiencies must be issued in one consolidated letter, not piecemeal. Respond within the stipulated time. The EPCG Authorisation issues after all deficiencies are cleared.

Step 9. Execute Bond and Bank Guarantee

File a Legal Undertaking with DGFT committing to the Export Obligation. Depending on category and turnover, a Bank Guarantee may also be required. Star Export Houses and certain categories are exempt from BG. Execute the LUT with the RA and register the authorisation with your port of import through ICEGATE.

Step 10. Import capital goods at zero duty

Present the EPCG Authorisation at Customs. Capital goods clear at zero BCD. The goods must be installed only at the declared premises. You cannot shift them to another site without RA approval. Within six months of import, file the Installation Certificate on the DGFT portal.

Step 11. Fulfil Export Obligation over six years

The EO is split into two blocks. Block 1 covers the first four years and requires 50 percent of EO fulfilment. Block 2 covers the last two years and requires the remaining 50 percent. You must also maintain your Average Export Obligation (the average of your exports of the same product in the three years preceding the authorisation) throughout the EO period. The Average EO is in addition to the specific EO from the EPCG. This is the part where exporters stumble most often.

Step 12. File annual EO reports

File annual EO reports on the DGFT portal by 30 June each year. The report captures exports made under the authorisation, shipping bill data, and realisation status via eBRC. Shipping bills must carry the EPCG file number for exports to count towards EO fulfilment.

Step 13. Apply for Export Obligation Discharge Certificate (EODC)

Once EO is complete, file ANF-5B on the DGFT portal for redemption. Attach the bank certificate of exports, shipping bills, eBRC, and installation certificate. The RA processes the EODC request. On successful redemption, the Bond is cancelled, any Bank Guarantee is released at Customs, and your file is closed.

The five mistakes that turn EPCG into a problem

Ignoring Average EO. Exporters focus on specific EO and forget they must also maintain their three-year average. Miss the Average EO even while hitting specific EO, and you owe duty plus interest.
Weak nexus certification. A one-line CE certificate saying “this machine is used for production of our export products” will not survive RA scrutiny. The nexus must tie each piece of equipment to a production step.
Late Installation Certificate. The six-month window from import is firm. Late filings require condonation applications, which add months of delay.
Relocating equipment without permission. Any change in installation premises requires RA approval in advance. Shifting first and informing later is a common and expensive error.
Missing shipping bill markings. Exports where the shipping bill does not carry the EPCG file number do not count towards EO. Train your CHA from day one.

EPCG in 2026: quick FAQs

Can I include spares and consumables in my EPCG authorisation?

Spares, dies, moulds, jigs, fixtures, tools, and refractories are eligible. Consumables are not covered under EPCG. Catalysts for initial charge and one subsequent charge are covered.

What if my sector is declining and I cannot meet Average EO?

Check Policy Circular 10/2025-26 to see if your product group is in the annexed list. If it is, your Average EO for FY 2024-25 is proportionally reduced. Apply to your RA for endorsement on the licence file.

Can I sell my EPCG capital goods after EO fulfilment?

After the EO is discharged and EODC is issued, the actual user condition is lifted and you can dispose of the equipment. Before EO fulfilment, any sale or transfer requires RA approval and may attract pro rata duty and interest.

Does RoDTEP rebate count towards EPCG Export Obligation?

No. RoDTEP is a remission scheme. Your shipping bill FOB value is what counts towards EO. RoDTEP is a parallel benefit you earn on the same shipping bill. Read our comparison of RoDTEP and Duty Drawback for how these stack.

Can I use an EPCG authorisation for used capital goods?

Yes. Second-hand capital goods are permitted under EPCG. They must meet the age norms notified by DGFT and be certified by a Chartered Engineer at the port of import.

Authoritative sources and further reading

Need help with your EPCG application?

RASP International has filed EPCG applications across textiles, engineering, food processing, and pharmaceutical sectors. If you are evaluating EPCG for a capital goods import or struggling with an open EO, book a free consultation or WhatsApp +91 8218043048. We run end-to-end, from CE certification to EODC issuance.