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“Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 13.02.2026

Electronic Hardware Technology Park (EHTP) Scheme

The Electronic Hardware Technology Park (EHTP) Scheme is a specialized initiative by the Government of India aimed at promoting the development and export of electronic hardware and software. ​ This scheme provides various benefits, including duty exemptions and other incentives, to units engaged in the manufacture and export of electronic goods and services. ​ Below is a detailed guide to understanding the EHTP Scheme, its legal framework, eligibility, process, required documents, and relevant notifications.

Legal Framework: Under Which Act? ​

The EHTP Scheme is governed by the Industries (Development and Regulation) Act, 1951 and the Customs Act, 1962. It was implemented through the Export and Import Policy (2002-2007), as notified by the Directorate General of Foreign Trade (DGFT), as amended from time to time (FTP 2023/HBP2023). The scheme is also supported by customs notifications, such as Notification No. 52/2003-Customs, which provides duty exemptions for eligible units. ​

What is the EHTP Scheme?

The EHTP Scheme was introduced to encourage the establishment of units dedicated to the manufacture and export of electronic hardware and software. ​ It allows units to import or procure goods without paying customs duty, provided they are used for export-oriented production. ​ The scheme is particularly beneficial for businesses involved in electronics manufacturing, software development, and integrated hardware-software production. ​

Key Features of the EHTP Scheme:

1. Duty-Free Imports: Units can import capital goods, raw materials, consumables, and other items required for production without paying customs duty.
2. Exemption from Taxes: Exemption from customs duty and additional duty under the Customs Tariff Act, 1975. ​
3. Flexibility in Operations: Units can re-export goods, transfer goods between eligible units, and temporarily remove goods for testing, repairs, or job work. ​
4. Surplus Power Utilization: Surplus power generated in captive power plants can be sold in Domestic Tariff Areas (DTAs) or transferred to other eligible units. ​
5. Support for Software Development: Units engaged in software development can avail exemptions for goods used in consultancy services abroad. ​

Who Can Avail Benefits Under the EHTP Scheme?

The following entities are eligible to avail benefits under the EHTP Scheme:

1. Export-Oriented Units (EOUs): Units engaged in manufacturing goods or services for export. ​
2. Software Technology Park (STP) Units: Units involved in software development and export. ​
3. Electronic Hardware Technology Park (EHTP) Units: Units focused on manufacturing and exporting electronic hardware or integrated hardware-software products. ​
4. Special Economic Zones (SEZs): Units operating within SEZs. ​
5. Other Export-Oriented Undertakings: Units engaged in specific sectors such as horticulture, agriculture, animal husbandry, aquaculture, granite quarrying, and gems/jewelry manufacturing. ​

Process to Apply for EHTP Scheme

To avail benefits under the EHTP Scheme, eligible units must follow these steps:

Step 1: Obtain Approval ​

• Submit an application to the Development Commissioner of STPI. ​
• The application should include details about the proposed unit, production plans, export targets, and other relevant information. ​

Step 2: Execute a Bond ​

• The unit must execute a bond with the Deputy Commissioner of Customs or Assistant Commissioner of Customs. ​ The bond ensures compliance with the conditions of the EHTP Scheme.

Step 3: Customs Bonding

• The unit must operate in a Customs Bonded Warehouse under Section 58 of the Customs Act, 1962. ​ This is necessary for duty-free import and storage of goods. ​

Step 4: Maintain Records ​

• The unit must maintain proper accounts of receipt, storage, utilization, and disposal of goods. These records must be submitted periodically to the Development Commissioner and Customs authorities.

Step 5: Export and Compliance ​

• The unit must ensure that the goods manufactured or services provided are exported as per the Export and Import Policy. ​ Any goods cleared for domestic consumption must comply with the applicable duty and conditions. ​

Documents Required for EHTP Scheme

To apply for the EHTP Scheme, the following documents are typically required:

1. Application form for EHTP unit registration.
2. Project report detailing production plans, export targets, and financial projections.
3. Authorization letter from the Development Commissioner. ​
4. Bond agreement with Customs authorities. ​
5. Proof of premises bonded under Section 58 of the Customs Act, 1962. ​
6. Agreement with contract farmers (if applicable). ​
7. Bank guarantee (if applicable). ​
8. Import/export licenses and approvals from DGFT.
9. Records of goods receipt, storage, utilization, and disposal. ​

Customs Notification No. ​ 52/2003

The Customs Notification No. ​ 52/2003, issued on 31st March 2003, provides the legal framework for duty exemptions under the EHTP Scheme. ​ Key highlights include:

1. Exemptions:
   • Exemption from customs duty and additional duty for goods specified in Annexures I to VI.
   • Goods include capital goods, raw materials, consumables, packaging materials, tools, machinery, and office equipment. ​
2. Conditions:
   • Units must be authorized by the Development Commissioner. ​
   • Goods must be used for export-oriented production or services. ​
   • Proper accounts must be maintained, and goods must be disposed of as per the Export and Import Policy. ​
3. Permitted Activities:
   • Re-export of goods. ​
   • Transfer of goods between eligible units without payment of duty. ​
   • Temporary removal of goods for testing, repairs, job work, or other operations necessary for manufacturing. ​
4. Special Provisions:
   • Surplus power generated in captive power plants can be sold in DTAs or transferred to other eligible units. ​
   • Exemptions for goods used in software development and consultancy services abroad. ​
5. Rescinded Notifications:
   • The notification rescinds several previous customs notifications, streamlining the process for duty exemptions for EHTP Units.

Customs Notification

DGFT Notification

The DGFT Notification No. 1(RE-2003)/2002-07, dated 31st March 2003, outlines the Export and Import Policy for the period 1 April 2002 – 31 March 2007. ​ It provides the policy framework for the EHTP Scheme, including:

1. Export Obligations: Units must achieve positive Net Foreign Exchange Earnings (NFE). ​
2. Domestic Tariff Area (DTA) Sales: Units can sell goods in DTAs up to a specified percentage of their export value, subject to payment of applicable duties.
3. Permitted Activities: Includes re-export, transfer of goods between eligible units, and temporary removal of goods for specific purposes.

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Source: Ministry of Electronics & IT, DGFT, CBIC

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