India offers several schemes that let you import without paying customs duty upfront - and manufacturers regularly ask us the same question: which one is right for us? It is a fair question, because choosing the wrong scheme means either an export obligation you cannot meet, or a saving you leave on the table. Advance Authorisation, EPCG and MOOWR each solve a different problem. Here is how to tell them apart and pick the one that fits.
The Three Schemes in One Line Each
- Advance Authorisation lets you import raw materials and inputs duty-free, provided they go into products you export.
- EPCG (Export Promotion Capital Goods) lets you import capital goods (machinery) at zero duty, against a future export obligation.
- MOOWR lets you defer duty on both inputs and capital goods by manufacturing in a bonded warehouse - with no export obligation at all.
The differences that matter are what each one covers, and what it demands from you in return.
The Comparison at a Glance
| Scheme | What you import duty-free | Export obligation | Best for |
|---|---|---|---|
| Advance Authorisation | Raw materials and inputs | Yes - export the finished goods | Exporters with steady export orders |
| EPCG | Capital goods (machinery) | Yes - a multiple of duty saved, over years | Exporters investing in plant and equipment |
| MOOWR | Inputs and capital goods | None | Manufacturers serving domestic + export |
| EMI scheme | Any imports (duty deferred, not waived) | None | Importers wanting monthly duty settlement |
The single biggest divider is the export obligation. Advance Authorisation and EPCG give you duty-free imports but tie you to exporting; MOOWR and the EMI scheme give you duty relief without locking you into an export commitment.
When Advance Authorisation Fits
Advance Authorisation is built for exporters who import inputs to manufacture export goods. If you have consistent export orders and import the raw materials that go into them, it removes duty on those inputs entirely. The trade-off is the export obligation and the norms that govern how much input you may import per unit exported - so it rewards businesses with predictable, documented export production.
When EPCG Fits
EPCG is about machinery. If you are investing in capital equipment to expand export production, EPCG lets you import that machinery at zero duty in exchange for an export obligation - typically a multiple of the duty saved, to be fulfilled over a period of years. It suits exporters making a capital investment they can back with future exports. Miss the obligation, and the saved duty (with interest) becomes payable.
Not sure which scheme your business qualifies for - or which saves you the most? We will map your imports and exports and recommend the right route. Book a free scheme assessment or message us on WhatsApp.
When MOOWR Fits
MOOWR is the most flexible of the three because it carries no export obligation. You defer duty on inputs and capital goods by manufacturing in a bonded warehouse, pay it only when goods are cleared for domestic sale, and avoid it entirely on exports. It suits manufacturers who serve both domestic and export markets and do not want to be locked into an export target. The trade-off is the bonded-warehouse compliance. Our full MOOWR guide walks through the detail.
How to Choose
The decision usually comes down to three questions. Do you export enough to comfortably meet an export obligation? If yes, Advance Authorisation (for inputs) or EPCG (for machinery) can give you outright duty-free imports. If you cannot commit to exporting, MOOWR gives you deferral without the obligation, and the EMI scheme offers simpler monthly deferral. And if you are unsure how much you will export, the flexibility of MOOWR usually beats the risk of an unmet obligation. In practice, we often see businesses combine schemes - EPCG for a new machine, MOOWR for ongoing inputs.
A Mistake We See Often
The most common error is chasing the biggest headline saving and taking on an export obligation the business cannot realistically meet. When the obligation is missed, the saved duty comes back with interest - turning a "saving" into a liability. The right scheme is not the one with the largest number; it is the one whose conditions match how your business actually operates.
People Also Ask
What is the difference between Advance Authorisation and EPCG?
Advance Authorisation covers duty-free import of raw materials and inputs used in export goods. EPCG covers duty-free import of capital goods (machinery). Both carry an export obligation.
Does MOOWR have an export obligation?
No. MOOWR lets you defer duty on inputs and capital goods with no export obligation, making it more flexible than Advance Authorisation or EPCG.
Can I use more than one scheme?
Often, yes. Many manufacturers combine schemes - for example EPCG for new machinery and MOOWR for ongoing inputs - based on which fits each need.
Which scheme is best for a manufacturer selling domestically?
MOOWR, because it has no export obligation. Advance Authorisation and EPCG are designed around exporting.
What happens if I miss an EPCG or Advance Authorisation export obligation?
The customs duty you saved becomes payable, typically with interest. This is why the export obligation should be realistic before you commit.
Is the EMI scheme the same as these?
No. The EMI scheme defers duty (you still pay it, monthly) rather than waiving it, and has no export obligation. It suits importers wanting simple cash-flow smoothing.
Our Take
Advance Authorisation, EPCG and MOOWR are all powerful - but only when matched to how your business trades. Export-heavy? Advance Authorisation or EPCG can eliminate duty. Mixed or domestic-focused? MOOWR's flexibility usually wins. The costly mistake is taking on an export obligation you cannot meet. Read our detailed guides on MOOWR and the EMI scheme before you decide.
Want the right scheme mapped to your actual imports and exports? We will run the comparison for your business and handle the application. Book a free consultation or use the enquiry form.
