EPCG VS EOU VS MOOWR

Introduction

Businesses in India that rely on imported inputs or capital goods often struggle to identify the most efficient duty-saving scheme. The Foreign Trade Policy and Customs Act provides multiple options—Export Promotion Capital Goods Scheme (EPCG), 100% Export Oriented Unit (EOU), and MOOWR Scheme each with its own incentives, compliance structure, and suitability depending on the company’s operations.

Choosing the right scheme can reduce compliance burden, avoid blockage of capital, and prevent penalties arising from non-fulfilment of export obligations.

This comparison table simplifies the key differences between EPCG, EOU, and MOOWR so that companies can make an informed, strategic decision based on their production model, export capability, and import dependency.

Particulars	EPCG	EOU	MOOWR
Customs Duty	Upfront exemption from customs duty on import of capital goods	Upfront exemption from customs duty on import of any goods	Duty deferment on warehoused goods; duty is waived if the goods are exported
License Requirement	EPCG Authorisation application to DGFT	Letter of Permission (LoP) application to SEZ/Customs	MOOWR licence application to Customs
Validity of Licence	18 months for import & 6 years to fulfil export obligation	5 years (extension permitted)	Not applicable
Export Obligation	Export value equal to 6× duty saved within 6 years + maintain average exports for past 3 years	Positive NFE to be achieved within 5 years from commencement of operations	No export obligation
Procurement from DTA	Treated as deemed exports	Qualifies as deemed export; supplies made on payment of applicable GST; EOU can claim refund/ITC	On payment of applicable GST
Sales in DTA	Allowed, subject to meeting export obligation	Allowed with permission; duty saved on imported inputs used in finished goods must be paid	Allowed; deferred duties on imported inputs used in finished goods must be paid
Second-hand Goods Import	Not permitted	Permitted	Permitted
Compliance Requirements	Limited compliances under FTP	Multiple FTP & customs compliances (records, extensions, APR/QPR/MPR, etc.)	Customs compliances including maintenance of records, warehouse-keeper, monthly returns, etc.
More Suitable When	Sufficient exports available to meet obligation	Unit intends to export entire production & import requirement is consistent	Large import of capital goods and goods not intended for sale soon (duty deferred until clearance)
Bond / Security	Not applicable	Bond equivalent to duty saved	Triple duty bond
Facility	EPCG licence can be availed  in the same existing facility and there is no need for a separate area or accounts for the same.	An EOU unit will have to be carved out of the existing factory, and this area becomes a Customs bonded premises and separate account has to be maintained for the EOU and the remaining factory	A MOOWR unit will have to be carved out of the existing factory, and this area becomes a Customs bonded premises and separate account has to be maintained for the MOOWR Unit and the remaining factory

Conclusion

EPCG, EOU, and MOOWR each offer strong benefits, but the best scheme depends entirely on a company’s business model:

• EPCG is ideal when the company has consistent exports and can comfortably meet export obligations.

• EOU suits units focused on export-led manufacturing and willing to maintain a separate bonded premise.

• MOOWR is the most flexible for companies with large imports especially of capital goods but limited domestic sales, as it provides duty deferment until clearance.

Understanding these differences helps businesses structure their operations efficiently, reduce working-capital pressure, and maximise the benefits available under India’s trade facilitation framework.