The EPCG Scheme is not limited to businesses that manufacture and export goods from their own factory. A merchant exporter may also be covered when it is tied to an eligible supporting manufacturer under the applicable DGFT provisions.

This arrangement requires careful coordination because the exporter, manufacturing unit, capital goods and proposed export product must be properly connected. The parties should define responsibilities before submitting the application or finalising the machinery transaction.

Why Is the Supporting Manufacturer Important?

A supporting manufacturer is the unit where capital goods imported or procured under an EPCG authorisation are installed and used for the relevant manufacturing activity.

The supporting manufacturer’s name and premises should be correctly reflected in the authorisation-related records. Businesses reviewing EPCG Scheme rules for Indian exporters should understand that a commercial relationship with a manufacturer alone may not complete the DGFT requirements.

The exporter should establish a clear connection between the proposed machinery, manufacturing process and goods intended for export.

What Should Be Aligned Before Applying?

The merchant exporter and supporting manufacturer should coordinate:

• Factory name and complete address;
• IEC and entity details;
• Export-product description;
• Machinery specifications;
• Proposed installation location;
• Production capacity;
• Existing export performance;
• Responsibility for maintaining documents.

Differences between the supplier quotation, EPCG application and factory records may result in clarification requirements.

Who Should Control the Machinery Documents?

Both parties should retain access to the relevant records. The authorisation holder may be responsible for DGFT compliance, while installation and production documents may originate from the supporting manufacturer.

A written internal arrangement can clarify who will maintain machinery invoices, installation evidence, production records, export documents and information required for future EODC filing.

How Should Export Records Be Maintained?

Export documents should be reviewed to ensure that the relevant parties and authorisation details are reported according to the prescribed requirements.

The export obligation cannot be monitored only through sales invoices. The applicant may also need consistent shipping bills, e-BRC details, export invoices and product records.

The merchant exporter should periodically reconcile exports completed through the supporting manufacturer instead of waiting until the end of the export-obligation period.

What If the Supporting Manufacturer Changes?

A change in supporting manufacturer should not be treated as an informal commercial adjustment. The authorisation holder may need to complete the applicable amendment or endorsement procedure and inform the relevant DGFT and Customs authorities.

Capital goods should not be shifted to another unit without first reviewing the prescribed conditions and installation-document requirements.

When Can EPCG Assistance Be Considered?

Businesses comparing EPCG authorisation support in India should check/epcg-scheme) whether the scope covers merchant-exporter eligibility, supporting-manufacturer endorsement, machinery documentation, application filing, authorisation amendments, export-obligation monitoring and EODC preparation.

The parties should also identify who will respond to future document requests and compliance queries.

Final Thoughts

The EPCG Scheme can accommodate a merchant-exporter and supporting-manufacturer structure, but the relationship must be supported by consistent authorisation, machinery, factory and export records.

Early coordination helps ensure that the parties understand their separate responsibilities. Eligibility and documentation should always be verified according to current DGFT provisions and the facts of the proposed arrangement.