Export Obligation Relief Announced Under EPCG Scheme for 2024-25

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Dated: 28.02.2026

Export Obligation Relief Announced Under EPCG Scheme for 2024-25

The Government of India, through the Ministry of Commerce and Industry, has issued Policy Circular No. 10/2025-26 dated February 26, 2026, addressing the Export Promotion Capital Goods (EPCG) Scheme. This circular provides significant relief to exporters in sectors where total exports have declined by more than 5% in 2024-25 compared to the previous year (2023-24). This blog aims to provide a detailed overview of the circular, its implications, and the sectors eligible for relief.

What is the EPCG Scheme?

The EPCG Scheme is a government initiative aimed at promoting exports by allowing import of capital goods at zero customs duty. In return, exporters are required to fulfill an Export Obligation (EO), which is calculated based on the average export performance of the sector/product group.

Key Highlights of Policy Circular No. 10/2025-26

Relief in Average Export Obligation (EO):
- As per Para 5.17(a) of the Handbook of Procedures (HBP) under the Foreign Trade Policy (FTP) 2023, exporters in sectors where total exports have declined by more than 5% compared to the previous year are eligible for relief in their Average EO.
- The reduction in Average EO will be proportionate to the decline in exports of the specific sector/product group during the relevant year.
Eligibility for Relief:
- Sectors or product groups that experienced a decline in exports during 2024-25 compared to 2023-24 are eligible for this relief.
- A detailed list of product groups and their percentage decline in exports has been annexed to the circular.
Implementation Guidelines:
- Regional Authorities of DGFT are instructed to re-fix the Annual Average EO for EPCG Authorizations for the year 2024-25 based on the percentage decline in exports.
- Any reduction in EO must be endorsed in the license file of the Regional Authority and reflected in the amendment sheet issued to the EPCG Authorization holder.
Consideration of Previous Policy Circulars:
- While addressing requests for discharge of EO, Regional Offices must also consider earlier Policy Circulars issued under previous FTPs (2009-14, 2015-20, and 2023) before issuing demand notices, Export Obligation Discharge Certificates (EODC), etc.

Export Data Analysis: Decline in Product Groups 

The annexure to the circular provides a comprehensive list of product groups that witnessed a decline in exports during 2024-25 compared to 2023-24. Some notable examples include:

Meat and Edible Meat Offal (HS Code: 0210): Decline of 26.60%.
Live Fish (HS Code: 0301): Decline of 33.99%.
Frozen Fish (HS Code: 0303): Decline of 7.49%.
Birds’ Eggs (HS Code: 0407): Decline of 14.99%.
Wheat and Meslin (HS Code: 1001): Decline of 96.42%.
Cotton (HS Code: 5201): Decline of 32.07%.
Petroleum Oils (HS Code: 2710): Decline of 25.01%.
Diamonds (HS Code: 7102): Decline of 18.36%.

The annexure lists over 360 product groups, each with detailed export figures for 2023-24 and 2024-25, along with the percentage growth or decline. This data serves as the basis for determining the relief in Average EO for exporters under the EPCG Scheme.

Implications for Exporters 

The relief in Average EO is a welcome move for exporters facing challenges due to declining global demand, supply chain disruptions, or other external factors. By reducing the EO proportionate to the decline in exports, the government aims to ease the burden on exporters and encourage them to continue their operations despite adverse market conditions.

Exporters holding EPCG Authorizations for the year 2024-25 should approach their respective Regional Authorities to request re-fixation of their Annual Average EO. It is crucial to ensure that the reduction is appropriately documented in the license file and amendment sheet.

Conclusion

The Policy Circular No. 10/2025-26 reflects the Government of India’s commitment to supporting exporters during challenging times. By providing relief in Average EO, the EPCG Scheme continues to play a vital role in promoting exports and boosting the country’s economy. Exporters are encouraged to review the annexed export data and take necessary steps to avail the benefits of this relief.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: DGFT

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