January 25, 2022
India’s top five export destinations include the US, China, the UAE, Italy, and Germany
India’s zero-duty Export Promotion Capital Goods (EPCG) scheme has helped in this growth
The EPCG scheme allows the import of capital goods for all stages of the production cycle
The engineering goods sector consists of metal products, industrial machinery, automobile component, and medical devices, among others
As per the Ministry of Commerce, engineering goods exports rose by 54% to reach US$ 81.8 billion during April-December 2021-22, accounting for over 27% of India’s total exports. In the corresponding nine-month period of 2020-21, engineering exports amounted to US$ 52.9 billion and over the entirety of 2020-21, exports from the sector reached US$ 76.62 billion. India’s top five export destinations include the US, China, the UAE, Italy, and Germany.
It is believed that India’s zero-duty Export Promotion Capital Goods (EPCG) scheme has helped in this growth. The scheme allows the import of capital goods for all stages of the production cycle, including completely knocked down/semi knocked down, and computer software systems at zero customs duty. This is subject to an export obligation comparable to six times of duty saved on capital goods imported under the scheme, which is to be fulfilled over six years from the issue of authorization.
The engineering goods sector comprises metal products, industrial machinery and equipment, automobiles and their components, transport equipment, bicycles, medical devices, and renewable equipment.