What is the Export Promotion Capital Goods (EPCG) Scheme?

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Overview:

The recently announced Foreign Trade Policy (FTP) has added the Prime Minister Mega Integrated Textile Region and Apparel Parks (PM MITRA) scheme as an additional scheme eligible for benefits under the Common Service Provider Scheme of the Export Promotion Capital Goods Scheme (EPCG).

About Export Promotion Capital Goods (EPCG) Scheme:

  • It is a trade promotion scheme implemented by the Indian government.
  • It allows the duty-free import of capital goods for the purpose of export production in India.
  • It was first operationalized on 1 April 2015.
  • Aim: To encourage the production of goods for export by providing import duty concessions on capital goods.
  • The EPCG scheme is administered by the Directorate General of Foreign Trade (DGFT) and is governed by the Foreign Trade Policy of India.
  • Features:
    • EPCG Scheme allows import of capital goods for pre-production, production and post-production at zero customs duty.
    • It covers manufacturer exporters with or without supporting manufacturer(s), merchant exporters tied to supporting manufacturer(s) and service providers.
    • Second-hand goods of any nature will not be permitted under the EPCG scheme.

What is the PM MITRA Scheme?

  • It will offer the opportunity to create an Integrated Textiles Value Chain, right from spinning, weaving, processing/dyeing and printing to garment manufacturing etc., at one location and will reduce the logistics cost of the Industry.
  • PM MITRA Parks will help in creating world-class industrial infrastructure that would attract large-scale investment, including foreign direct investment (FDI) and encourage innovation and job creation within the sector.
  • Special Purpose Vehicle owned by the Centre and State Government will be set up for each park which will oversee the implementation of the project.
  • Funding:
    • The Ministry of Textiles will provide financial support in the form of Development Capital Support up to Rs. 500 crores per park to the Park SPV.
    • A Competitive Incentive Support (CIS) of up to Rs 300 crore per park to the units in PM MITRA Park shall also be provided to incentivise speedy implementation.
    • State governments will provide a contiguous and encumbrance-free land parcel of at least 1000 acres of land.

 


Q1) What is the Directorate General of Foreign Trade (DGFT)?

This Directorate, with headquarters at New Delhi, is responsible for formulating and implementing the Foreign Trade Policy with the main objective of promoting India's exports. The DGFT also issues scrips/authorization to exporters and monitors their corresponding obligations through a network of 24 regional offices.

Source: FTP expands export promotion scheme to include PM MITRA