The Export Oriented Unit (EOU) Scheme is a Government of India initiative that allows units to engage in manufacturing goods or rendering services exclusively for export purposes. EOUs enjoy duty-free imports and other tax benefits to boost India’s export performance.
Why EOU Scheme is Important?
- Encourages 100% export-oriented manufacturing and services.
- Provides duty-free procurement of raw materials, capital goods, and consumables.
- Helps Indian businesses compete globally by lowering costs.
- Supports employment generation and foreign exchange earnings.
Key Benefits of EOUs
- Duty-free import/procurement of raw materials, capital goods, and consumables.
- Exemption from GST on procurement under deemed exports.
- Eligibility for export promotion schemes such as EPCG and RoDTEP.
- Permission to sell part of production in the Domestic Tariff Area (DTA) with concessional duties (subject to conditions).
- Relaxed norms for foreign direct investment (FDI) and external commercial borrowings (ECB).
Eligibility to Set Up an EOU
- Units engaged in manufacturing, services, repair/reconditioning, or software development for export.
- Approval required from the Development Commissioner under the Ministry of Commerce.
- Minimum investment criteria may apply depending on sector and activity.
Required Documents
- Application form in prescribed format (to the Development Commissioner).
- Company registration documents (MoA, AoA, Incorporation Certificate).
- Project report with export projections and investment details.
- IEC (Import Export Code) and GST registration.
- Board resolution and authorization documents.
Key Tips
- Ensure 100% export compliance except permitted DTA sales.
- Maintain proper accounts for duty-free imports and exports.
- Track changes in FTP (Foreign Trade Policy) and GST for EOU-specific provisions.
- Seek professional guidance for smooth customs and DGFT clearances.
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