1. Export Credit Guarantee Corporation of India Ltd.
introduces innovative non-recourse maturity export factoring
Export Credit Guarantee Corporation of India Ltd. (ECGC) has announced
introduction of its non-recourse maturity export factoring. The scheme has certain
unique features and does not exactly fit into the conventional mould of maturity
factoring. The changes devised are intended to give the clients the benefits of full
factoring services through a maturity factoring scheme, thus effectively addressing
the needs of exporters to avail themselves of pre-finance (advance) on the receivables,
for their working capitals requirements.
One of the major deviations in this regard is the very important role and special benefits
envisaged for banks, under the scheme.
The services provided by ECGC under its export maturity factoring scheme are 100 per
cent credit guarantee protection against bad debts, sales register maintenance in respect of
factored transactions, and regular monitoring of outstanding credits, facilitating due
collection in the due date of recovery, at its own cost, of all recoverable bad debts.
Payments would be received by the exporter, in his account, through normal banking
channels. In the event of non-realization of dues on factored export receivables, ECGC will
promptly make the payment in Indian currency of an equivalent amount, immediately upon
the crystallization of dues by the bank (exchange rate applicable, as on the date of
crystallization).
The Corporation would facilitate easier availability of bank finance to its factoring clients
by rendering such advances to be an attractive proposition to banks. The factoring
agreement that would be concluded by ECGC with its clients has an in-built provision
incorporating an on-demand guarantee in favour of the bank without any payment or
compliance or other requirements to be satisfied by the bank.
The following are the benefits for exporters under the scheme :
= Option to give easier credit terms to customers – better protection than an ILC, without
the need to insist on establishing one.
= More friendly delivery terms offered, like direct delivery to the customer (as against DP/
DA) without any risk.
= Reduced foreign bank handling charges on documents.
= Substantial cost savings and complete freedom in monitoring and follow up (telephones,
faxes, follow-up visits) of receivables, overdue bank interest on delayed collections and
recovery expenses relating to bad debts.

2. = Increase in export sales, thanks to more competitive terms offered to customers.
= Better security than letters of credit.
= Elimination of uncertainties relating to realization of accounts receivables resulting in
better cash management to meet working capital requirements.
= Full attention to procurement/production, marketing and sales and growth of business,
due to freedom from chasing receivables.
For banks, it would be a win-win situation all the way. Advances given against ECGC-
factored export receivables could become the most preferred export advance portfolio for a
bank, even better than the advances granted under an ILC. There is 100 per cent credit
protection, free of cost.
The other benefits for banks are :
= Prompt and immediate payment by ECGC of the full amount outstanding on the
receivables to the bank, within three days of crystallization of the dues, in the event of non-
realisation of factored receivables on the due date, without any protracted processing or
scrutiny and without raising any queries.
= Savings on post-shipment guarantee premium to be paid to ECGC, if any.
= No pre-disbursal risk assessment or post-disbursal monitoring required of the bank. Full
risk is on ECGC, with regard to repayment of the amount due (in rupees).
= Opportunity to build ‘zero-risk assets’, since the bank would not run any risk on the
borrower, the country or on the buyer.
= Banks could earn interest on a priority sector lending, without any of the attendant risks
or hassles.
= Opportunity to satisfy additional working capital needs of the customer by sanctioning
additional limits without enlarging the exposure risks.
Banks would be furnished with a certified copy of the factoring agreement concluded
between the client and ECGC. When a limit is established by ECGC on an overseas
customer in favour of an exporter-client, the Corporation would directly communicate to
the concerned bank branch all relevant details of the limit available to the exporter on that
specified overseas customer, and would confirm in writing its obligations to the bank in
respect of advances it may grant against such ECGC-factored export receivables.
The bank’s role lies in encouraging exporter-customers to explore the possibility of
availing of the factoring facility from ECGC. Factoring, being a high-risk premium

3. product, could be made available only in respect of receivables due from select customers.
Banks may consider sanctioning of additional limits to exporters against risk-free advances
when ECGC communicates setting up of the factoring facility and the permitting limit in
respect of individual buyers.
Banks also could help ECGC to collect factoring charges on each of the factored invoices.
ECGC covers every facet of the exporter’s risks. It is the only corporation that is
committed to taking your exports higher.
EXPORT SCENARIO
Like the standard policy, this policy is based on the whole-turnover principle. An exporter
availing himself of it will be able to exercise the options that are available under the
standard policy with regard to exclusion of shipments against letters of credit and also
those to associates.
Further, in respect of policyholders who are trading houses and above, the option available
under the standard policy for exclusions of specified countries or specified commodities or
any combinations of the same will continue.
Premium
Based on the projected turnover, the amount of premium payable for the year will be
determined. The basic premium rates will be those applicable for the standard policy.
Exporters holding the standard policy will be given a turnover discount of 10 percent in
addition to the "no-claim bonus" enjoyed by them under their policy, subject to a minimum
total discount of 20 per cent.
For exporters not holding, the standard policy, a discount of 20 percent will be granted in
the premium.
The premium calculated on the projected turnover will be payable in four equal quarterly
instalments. However, payment through monthly instalments will be considered on a case-
to-case basis. The first instalment of premium is payable within 15 days from the date the
premium is called for. Subsequent instalments will have to be paid within 15 days from the
beginning of the relevant period.
At the end of the policy period, after the policyholder submits the statement for the fourth
quarter, the premium payable for the actual exports effected during the year will be worked
out. In case the premium payable based on the actual turnover is less than that paid on the
basis of projections, the excess amount paid will be carried over to the next policy period
and could be adjusted in the premium for the first month/quarter for the renewed policy.
If the actual premium exceeds the projected premium by not more than 10 per cent, the

4. excess is not required to be paid (Thus there is a built-in incentive in the scheme for the
exporters to increase their export turnover).
If the actual premium exceeds the projected premium by more than 10 percent, the
exporter will be advised to remit the premium amount in excess of 10 per cent. In case the
exporter fails to pay the premium within 30 days from the date it is called for, cover for
any loss in respect of the policy would be limited to the turnover in respect of which
premium has been paid.
Monthly declarations of shipments will not be required to be submitted under the policy.
Instead, a statement of shipments made during the quarter in the prescribed format has to
be furnished by the policyholder within 30 days from the end of the quarter.
Declarations of payments remaining overdue for more than 30 days as at the end of the
month are to be made on or before 15th of the following month.
ECGC’s specific buyer-wise policy
Export Credit Guarantee Corporation of India Ltd. (ECGC) has been offering
different polices to exporters according to their requirement. One such new
innovation is the "specific buyer-wise policy". This is meant for those exporters who
want to cover exports made to selective buyers from whom they have regular orders.
Exporters who want to cover their shipments made to a buyer or a set of buyers can avail
of this policy. Those holding the SCR policy also can take advantage of this policy to get
the cover in respect of buyers, shipments to whom are in the excluded categories like L/C,
country, commodity, etc., as applicable. The policy is valid for one year.
Risk covered
Commercial risks covered are insolvency of the buyer/LC opening bank (as applicable);
default by the buyer/LC opening bank to make payment within four months from the due
date; and the buyer’s failure to accept the goods, subject to certain conditions/bank’s
failure to accept the bill drawn on it under the letter of credit opened by it.
Political risks covered are the imposition of restriction by the Government action which
may block or delay the transfer of payment made by the buyer; war, civil war, revolution
or civil disturbances in the buyer’s country; new import restrictions or cancellations of a
valid import licence; interruption or diversion of voyage outside India resulting in payment
of additional freight or insurance charges which cannot be recovered from the buyer; and
any other cause of loss occurring outside India, not normally insured by general insurers
and beyond the control of both the exporter and the buyer.
Premium is payable on the projected turnover for each quarter in advance. Important
obligations of the exporter are the declaration of shipments made during the quarter within

5. 15 days after the end of the quarter and that of payments overdue for a period of 30 days
or more from the due date as at the end of the month by the 15th of the succeeding month.
The exporter should, in consultation with ECGC, take effective steps for recovery of the
debt. All amounts recovered, net of recovery expenses, shall be shared with ECGC in the
same ratio in which the loss was shared.
Turnover policy offers extra benefits
The turnover policy of ECGC is a variation of the standard policy introduced for the
benefits of large exporters who contribute not less than Rs. 10 lakhs per annum towards
premium. The policy envisages projection of the export turnover by the policyholder for a
year and the initial determination of the premium payable on that basis, subject to
adjustment at the end of the year based on the actuals.
It provides additional discount in premium with an added incentive for increasing the
exports beyond the projected turnover and also offers a simplified procedure for premium
remittance and filing of shipment information.
The turnover policy can be availed of by any exporter whose anticipated export turnover
would involve payment of not less than Rs. 10 lakhs per annum towards premium. The
policy is valid for one year.
THE ECGC PROGRAMME HIGHLIGHTS THE
USEFULNESS OF ITS SCHEMES
The Export Credit Guarantee
Corporation of India Limited [ECGC], Mumbai, with the cooperation of the PDEXCIL organised a
programme on various schemes of the ECGC. The programme was organised at Hotel Astoria, Mumbai on
Friday, the 16 th of January, 2004. A number of members of the PDEXCIL attended this programme. Smt.
Geeta Muralidhar, General Manager, ECGC in her inaugural speech explained the functions of the ECGC
and its contribution to the exporting community. She also gave the details of the extent of claims settled,
with a view to indicate the usefulness of the ECGC Schemes and to infuse confidence among the exporters
to continue to be in the export field. She also stated that a number of schemes have been modified taking

6. into account of the ground realities. Outlining the future policy, she stated that ECGC would like to create
awareness among the exporters with regard to the facilities provided by the ECGC. She also stated that
ECGC has expanded as an organisation and set up branches in various corners of the country, with a view to
reach the exporters in meeting their requirements.
Shri M. Y. Momin, Past Chairman, PDEXCIL, commended the ECGC for organising the programme to
apprise the exporters of the various provisions of the ECGC Schemes. He also expressed his desire to hold
such programmes in different centres, with a view to reach to the exporters situated in different areas. He
also assured PDEXCIL’s co-operation in the effor ts of ECGC, as it also constitutes export promotional
work. He hoped that the members present at the meeting would be enriched with knowledge to tackle
difficult situation in their export effor ts. He also requested the members present to take full advantage of the
programme.
Shri R. Mohan, Asst. General Manager, ECGC gave a detailed presentation of the various schemes
operated by the ECGC. Apart from the standard policy, he also drew attention to the provisions of the other
policies such as Small Exporters Policy, Specific Shipment Policy etc. Some of the exporter members
present, explained about the personal difficulties which they had experienced in availing claims of various
nature. It was also requested to make settlement of the claims promptly against the covers taken, to mitigate
the difficulties of the exporters.
Among the various schemes, Small Exporters Policy which is meant for small exporters whose total
export turnover for 12 months period is not more than 50 lakhs, will be ver y much useful to the members of
the PDEXCIL. The premium covered under this scheme, is also lower as compared to that of, under the
standard policy.
The ECGC has also introduced Specific Shipment Policies with a view to cover risk in respect of specific
shipments. Under the standard policy, the entire export turnover of the exporter is taken into consideration,
whereas under the Specific Shipment Policy, only turnover relating to specific shipment is taken into
consideration. Specific Shipment Policy is preferable, as concerned shipments are only covered under this
scheme. Although the premium under this scheme is higher, as compared to that under the Standard Policy,
it is advisable to go in for specific shipment, provided exporters desire to have cover in respect of certain
shipments.
Under the ECGC’s Non Recourse Maturity Export Factoring Scheme, introduced in April, 2002, 100%
credit guarantee protection is available against bad debts on factored receivables. Exporters are required to
enter into a Factoring Agreement with ECGC and offer all future transactions with those buyers on whom
permitted limit has been established, to ECGC for factoring. This scheme is also preferable, as it provides
security as regards receivables.
The responses received from the exporters at the above programme organised by the ECGC, indicated
considerable interest on the provisions of the various ECGC schemes.
At the end of the programme, Shri P. L. Thakur, Assistant General Manager, ECGC proposed vote of
thanks to all those present and to the PDEXCIL for extending its cooperation.

7. The details of the standard policy of the ECGC for providing cover against the commercial and political
risks are given in this issue. The provisions of the other schemes particularly Small Exporters Policy,
Specific Shipment Policy etc. will be published in the ensuing issues.
Standard Policy
The Need for a Policy
Payment for goods shipped by an exporter is open to certain risks. Unless the payment has been received in
advance or is supported by an irrevocable Letter of Credit confirmed by a bank in India. Failure of a large
payment can wreck an exporter’s business.
In any case, the existence of the risks and the exporter’s knowledge of their existence, may make him adopt
a very cautious attitude towards new business. Orders which could have proved beneficial may be given up
because of excessive caution.
An ECGC Policy is designed to protect exporters from losses that may arise due to a variety of commercial
and political risks which are beyond their control. Backed by this insurance, an exporter can expand his
business by taking on new buyers, entering new markets or by taking up new products.
Shipments (Comprehensive Risks) Policy
ECGC has designed several policies to suit every type of export transaction. For exporters with an annual
export turnover in excess of Rs. 50 lakhs. the Shipments (Comprehensive Risks) Policy is the one intended
for covering shipments made on cash basis or on short-terms credit, i.e., credit not exceeding 180 days.
Risks covered under the Policy
Under the Shipments (Comprehensive Risks) Policy, the Corporation covers from the date of shipment, the
following risks:-
Commercial Risks
• Insolvency of the Buyer.
• Failure of the buyer to make the payment due within a specified period normally 4 months from the
due date.
• Buyer’s failure to accept the goods, subject to certain conditions.
Political Risks
• Imposition of restrictions by the Government of the buyer’s country or any Gover nment action
which may block or delay the transfer of payment made by the buyer.
• War, Civil war, revolution or civil disturbances in the buyer’s country.
• New import restrictions or cancellation of a valid import licence.
• Interruption or diversion of voyage outside India resulting in payment additional of freight or

8. insurance charges which cannot be recovered from the buyer.
• Any other cause of loss occurring outside India, not normally insured by general insurers, and
beyond the control of both the exporter and the buyer.
Risk Not Covered
• The policy does not cover losses due to the following risks :
• Commercial disputes including quality disputes raised by the buyer, unless the exporter
obtains a decree from a competent court of law in the buyer’s country in his favour.
• Causes inherent in the nature of the goods.
• Buyer’s failure to obtain necessary import or exchange authorisation from authorities in
his country.
• Insolvency or default of any agent of the exporter or of the collecting bank.
• Loss or damage to goods which can be covered by general insurers.
• Exchange rate fluctuation.
• Failure of the exporter to fulfil the terms of the export contract or negligence on his part.
Shipments Covered
The Shipments (Comprehensive Risks) Policy is meant to cover all the shipments that may be
made by an exporter during a period of 24 months ahead. In other words, an exporter is required
to get the insurance provided by the Policy for each and ever y shipment that may be made by
him in the next 24 months. The Policy cannot be issued for selected shipments, selected buyers
or selected markets.
Exclusions
An exporter may, of course, exclude shipments made against advance payment or those which
are supported by irrevocable Letters of Credit which carry the confirmation of banks in India,
since he faces no risk in respect of such transactions. Where an exporter is dealing with several
distinct items, ECGC may agree to exclude all shipments of certain agreed items, provided that
what is offered for insurance consists of all items of allied nature and offers the Corporation a
reasonable portion of the exporter’s total business with fair spread of risks.
Shipment Against Letters of Credit
Unless they are confirmed by banks in India, payments under irrevocable Letters of Credit are
subject to political risks. Exporters, therefore, will be well advised to get them also covered
under the Policy. Such shipments, which are excluded from the scope of the Policy, can be
covered under it if an exporter so desires, Lower premium rates are applied to them because they
do not involve commercial risks and only the political risks have to be covered. For shipments
made against irrevocable Letters of Credit, and exporter has option to obtain either political risks
cover only or cover for comprehensive risks, i.e. for all political risks and the risk of insolvency
or default of the bank opening the irrevocable Letter of Credit. In either case, cover will be

9. provided by the Corporation only if the exporter agrees to get all the shipments made against
irrevocable Letters of Credit covered under the Policy. Cover will not be available for selected
transactions. ECGC is the first credit insurance institution in the world to provide cover for
discrepant L/C which is limited to 25% of Gross Invoice value.
Shipments to Associates
Shipments to associates, i.e. foreign buyers in whose business the exporter has a financial
interest, are normally excluded from the Policy. They can, however, be covered against political
risks under the Policy if an exporter so desires. Where the associate is a public limited company
in which the exporters’s shareholding does not exceed 49%, cover can be provided against
insolvency risks in addition to all the political risks.
Shipments on Consignment Basis
Shipments which are made to an overseas agent, under an agreement that he will receive the
goods as agent of the exporter and remit the proceeds on their being sold by him, are excluded
from the scope of the Policy. However, if an exporter wants it, the Corporation can get them
included under the Policy. Only political risks will be covered on the agent, but comprehensive
cover can be given for the ultimate buyers, if sales are effected to them on credit basis.
Shipments Made by AIR
Where shipments are made by air, the buyers are often able to obtain deliver y of the goods from
the airlines before making payment of the bill or accepting it for payment, as the case may be. If
the buyers fails to make the payment subsequently as per the contract, the risk of loss will not be
covered under the Policy if premium has been paid on the shipment for DP or DA terms of
payment. An exporter can, however, get cover for such shipment if he obtains Credit Limit on
such buyers on Open Delivery terms and also pays premium at rates applicable to Open Delivery
terms.
Additional Cover for Shipments to Government Buyers
All shipments made to Government buyers are covered under the Policy against political risks.
The exporters has, therefore, to declare such shipments to the Corporation and pay premium at
rates for covering political risks. The Corporation’s Specific approval should be obtained where
the country is in the list of Restricted Cover Countries. This cover does not extend to commercial
risks like default or non-acceptance of goods. If an exporter wants these risks also to be covered,
then he should write to the Corporation asking that risk number (xi) described in the Policy be
also covered. In his letter, the exporter should give information about the name and address of
the buyer, the status of the buyer and the details of the contract. If the Corporation approves the
request, the shipments concerned will be covered against comprehensive risks if the exporter
pays premium on those shipments at rates applicable for comprehensive risks. It may be noted
that the Corporation will consider the following as Government Buyers : (a) a department of the
Central Government and (b) if the buyer be a Government body like a Board, State Government,

10. Municipality or Government owned Corporations / Companies, if the performance of the
contract is guaranteed by the Central Government.
How The Risks Are Covered
Maximum Liability
As the Policy is intended to cover all the shipments that may be made by an exporter in a period
of 24 months ahead, the Corporation will fix its Maximum Liability under each Policy. The
Maximum Liability is the limit upto which ECGC would accept liability for shipments made in
each of the policy years, for both commercial and political risks. It will be advisable for
exporters to estimate the maximum outstanding payment due from overseas buyers at any one
time during the policy period and to obtain the policy with Maximum Liability for such a value.
The Maximum Liability fixed under the Policy can be enhanced subsequently, if necessary.
Credit Limits On Buyers
Commercial risks are covered subject to a Credit Limit approved by the Corporation on each
buyer to whom shipments are made on credit terms. The exporter has, therefore, to apply for a
suitable Credit Limit on each buyers. On the basis of its own judgement of the creditwor thiness
of the buyer, as ascertained from credit reports obtained from banks and specialised agencies
abroad, the Corporation will approve a Credit Limit which is the limit upto which it will pay
claim on account of losses arising from commercial risks. The Credit Limit is a revolving limit
and once approved, it will hold good for all shipments to the buyer as long as there is no gap of
more than 12 months between two shipments. Credit Limit is a limit on the Corporation’s
exposure on the buyer for commercial risks and not a limit on the value of shipments that may be
made to him. Premium has, therefore, to be paid on the full value of each shipment even where
the value of the shipment or the total value of the bills outstanding for payment is in excess of
the Credit Limit.
As the Credit Limit is indicative of the safe limit of credit that can be extended to the buyer, it
will be advisable for exporters to see that the total value of the bills outstanding with the buyer at
any one time is not out of proportion to the Credit Limit. In cases where the Credit Limit that the
Corporation is prepared to grant is far lower than the value of outstandings, exporters should
discuss the problem with the Corporation.
Some of the other schemes offered by ECGC are
Specific Policies

11. Desinged to protect Indian firms against payment risks involved in (a) exports on deferred terms
of payment, (b) services rendered to foreign parties and (c) construction works and turnkey
projects undertaken abroad.
Financial Guarantees
Issued to banks in India to protect them from risks of loss involved in extending financial support
to exporters at pre-shipment and post-shipment stages.
Special Schemes
Transfer Guarantee mean to protect banks which add confirmation to Letter of Credit opened by
foreign banks, Insurance cover for Buyer’s Credit and Line of Credit, Overseas Invesment
Insurance and Exchang Fluctuation Risk Insurance.
Financing methods for import and export of capital goods in India
Introduction
The Government of India offers many incentives to Indian importer under special schemes.
These schemes are mostly available on those imported product, which will be latter on used for
manufacturing of goods meant for export. This not only stimulates the industrial growth and
development but also brings the foreign currency after the final export process. The following
are some of the important import incentives offered by the Government of India, which
significantly reduce the effective tax rates for the import companies:
Preferential Rates
Any type of import incentive under preferential rate is only applicable for the import o goods
from certain preferential countries such as Mauritius, Seychelles and Tonga provided certain
conditions are satisfied. The certificate of origin is very important in order to avail of the benefits
of such concessional rates of duty.
DEPB
Duty Entitlement Pass Book in short DEPB is basically an export incentive scheme. The
objective of DEPB scheme is to neutralize the incidence of basic custom duty on the import
content of the exported products. Notified on 1/4/1997, the DEPB Scheme consisted of (a) Post-
export DEPB and (b) Pre-export DEPB. The pre-export DEPB scheme was abolished w.e.f.

12. 1/4/2000. Under the post-export DEPB, which is issued after exports, the exporter is given a
Duty Entitlement Pass Book at a pre-determined credit on the FOB value. The DEPB allows
import of any items except the items which are otherwise restricted for imports.
Duty Drawback
Duty Drawback rates in India is the special rebate given under the Section 75 of Indian Customs
Act on exported products or materials. Duty drawback rates or concession are only applicable on
products which are used in the processing of goods manufactured in India and then exported to
foreign countries. Duty Drawback is not given on inputs obtained without payment of customs or
excise duty. In case of re-export of goods, it should be done within 2 years from the date of
payment of duty when they were imported. 98% of the duty is allowable as drawback, only after
inspection. If the goods imported are used before its re-export, the drawback will be allowed as
at reduced per cent.
All industry drawback rates are fixed by Directorate of Drawback, Dept. of Revenue, Ministry of
Finance and Government of India and are periodically revised - normally on 1st June every year.
Section 37 of Central Excise Act allows Central Government to frame rules for purpose of the
Act. Under these powers, ‘Customs and Central Excise Duties Drawback Rules, 1995’ have been
framed.
DFRC
Under the Duty Free Replenishment Certificate (DFRC) schemes, import incentives are given to
the exporter for the import of inputs used in the manufacture of goods without payment of basic
customs duty. Such inputs shall be subject to the payment of additional customs duty equal to the
excise duty at the time of import. Duty Free Replenishment Certificate (DFRC) shall be available
for exports only up to 30.04.2006 and from 01.05.2006 this scheme is being replaced by the Duty
Free Import Authorisation (DFIA).
DFIA
Effective from 1st May, 2006, Duty Free Import Authorisation or DFIA in short is issued to
allow duty free import of inputs which are used in the manufacture of the export product (making
normal allowance for wastage), and fuel, energy, catalyst etc. which are consumed or utilised in
the course of their use to obtain the export product. Duty Free Import Authorisation is issued on
the basis of inputs and export items given under Standard Input and Output Norms (SION).
Deemed Exports
Deemed Export is a special type of transaction in which the payment is received before the goods
are delivered. The payment can be done in Indian Rupees or in Foreign Exchange. As the
deemed export is also a source of foreign exchange, so the Government of India has given the
benefit duty free import of inputs.
Agri Export Zones
Various importers that come under the Agri Export Zones are entitled to all the import facilities
and incentives.
Served from India

13. In order to create a powerful “Served from India” brand all over the world, the government has
provided different type of import incentive to the invisible export providers. Under the Served
from India Scheme, import incentive is given for import of any capital goods, spares, office
equipment and professional equipment.
Manufacture under Bond
Under the Manufacture under Bond Scheme, all factories registered to produce their goods for
export are exempted from import duty and other taxes on inputs used to manufacture such goods.
Against this the manufacturer is allowed to import goods without paying any customs duty. The
production is made under the supervision of customs or excise authority.
Export Promotion Capital Goods Scheme (EPCG)
EPCG is a special type of incentive given to the EPCG license holder. Capital goods imported
under EPCG Scheme are subject to actual user condition and the same cannot be transferred
/sold till the fulfillment of export obligation specified in the license. In order to ensure that the
capital goods imported under EPCG Scheme, the license holder is required to produce certificate
from the jurisdictional Central Excise Authority (CEA) or Chartered Engineer (CE) confirming
installation of such capital goods in the declared premises. Under Export Promotion Capital
Goods (EPCG) scheme, a license holder can import capital goods such as plant, machinery,
equipment, components and spare parts of the machinery at concessional rate of customs duty of
5% and without CVD and special duty.