The Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industry, has issued Policy Circular No. 10/2025-26 dated 26th February 2026, extending relief to exporters under the Export Promotion Capital Goods (EPCG) Scheme in accordance with para 5.17(a) of the Handbook of Procedures (HBP) of the Foreign Trade Policy (FTP) 2023.
As per this provision, sectors or product groups that recorded a decline of more than five percent in exports during 2024-25 as compared to 2023-24 are eligible for proportionate reduction in Average Export Obligation (EO). The DGFT has analysed export performance and compiled a detailed list of HS-code-wise product groups that experienced such decline, as reflected in the annexed export data. Regional Authorities (RAs) of DGFT have been instructed to re-fix the Annual Average EO for all relevant EPCG Authorisations for 2024-25 based on the percentage fall in exports for each sector or product group.
This revision is required to be endorsed both in the official licence file of the RA and through an amendment sheet issued to the respective EPCG Authorisation holder.
Further, while processing cases relating to EO discharge or evaluating shortfall in EO fulfilment, RAs have been directed to also consider earlier Policy Circulars issued under para 5.11.2 of the HBP 2009-14, para 5.19 of the HBP under FTP 2015-20, and para 5.17 of FTP 2023 before taking any action such as issuance of demand notices or EODCs. This requirement must also be included in the EODC Check-Sheet to ensure uniform compliance.
The Complete Policy Circular along with the annexure can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/02/Policy-Circular-No.-10-2025-26.pdf
