Deemed Exports Scheme

Every licensed exporter in India does not aspire to export ingenious goods to a foreign land. However, they do wish to receive the benefits enlisted for exporters who transport their goods abroad. This is where the Deemed Exports Scheme comes into the picture.


The Deemed Exports Scheme aims to create a level playing field for the domestic industry vis-à-vis direct import by providing duty free inputs or exemption/refund of duty paid on goods manufactured in India.


How does an exporter benefit from this scheme?

An exporter can benefit from this scheme in the following ways:

  • Advance authorisation for annual requirement/DFIA Deemed Export Drawback
  • Exemption from terminal excise duty where supplies are made against ICB

Eligibility Criteria:

What is the eligibility criteria for this scheme?

All the licensed exporters* are eligible for this scheme.

*The following categories of supply of goods by the main/ sub-contractors shall be regarded as “Deemed Exports” under this Policy, provided the goods are manufactured in India:

(a) Supply of goods against Advance Licence / Advance Licence for annual requirement/DFRC under the Duty Exemption /Remission Scheme;

(b) Supply of goods to Export Oriented Units (EOUs) or Software Technology Parks (STPs) or Electronic Hardware Technology Parks (EHTPs) or Bio Technology Parks (BTP);

(c) Supply of capital goods to holders of licences under the Export Promotion Capital Goods (EPCG) scheme;

(d) Supply of goods to projects financed by multilateral or bilateral agencies/funds as notified by the Department of Economic Affairs, Ministry of Finance under International Competitive Bidding in accordance with the procedures of those agencies/ funds, where the legal agreements provide for tender evaluation without including the customs duty;

(e) Supply of capital goods, including in unassembled/ disassembled condition as well as plants, machinery, accessories, tools, dies and such goods which are used for installation purposes till the stage of commercial production and spares to the extent of 10% of the FOR value to fertilizer plants;

(f) Supply of goods to any project or purpose in respect of which the Ministry of Finance, by a notification, permits the import of such goods at zero customs duty;

(g) Supply of goods to the power projects and refineries not covered in (f) above;

(h) Supply of marine freight containers by 100% EOU (Domestic freight containers-manufacturers) provided the said containers are exported out of India within 6 months or such further period as permitted by the customs;

(i) Supply to projects funded by UN agencies; and

(j) Supply of goods to nuclear power projects through competitive bidding as opposed to International Competitive Bidding.

Eligibility for refund of terminal excise duty/drawback:

  • The recipient of the goods does not avail CENVAT credit or rebate on goods.
  • If the CENVAT credit facility/rebate has not been availed by the applicant these supplies will however be eligible for deemed export drawback on the customs duty paid on the inputs/components.


How can an SME body apply for this scheme?

An SME body can apply for this scheme by clicking here

Documents Required:

What documents are required to apply for this scheme?

Click here to know about the documents required.

For further details on this scheme, click here.

Protect your Business Investment with the Small Exporters Policy

The business environment is extremely dynamic, experiencing massive highs and lows based on domestic and international market responses. For a small business trading in exports, this can be beneficial when the economy is booming, but disastrous when it crashes. Wondering how you can protect yourself from crashing with the economy? The Small Exporters Policy will help you do so.


The Small Exporters Policy scheme is specially designed for small scale industries. This scheme provides SME firms with an insurance cover and thereby prevent your downfall.


The salient features of Small Exporters Policy are listed below:

Period of Policy:

Small Exporter’s Policy is issued for a period of 12 months.

Minimum premium:

Premium payable will be determined on the basis of projected exports on an annual basis subject to a minimum premium of ₹5000 for the policy period. No claim bonus in the premium rate is granted every year at the rate of 5%.

Declaration of shipments:

Shipments need to be declared monthly.

Declaration of overdue payments:

Small exporters are required to submit monthly declarations of all payments remaining overdue by more than 60 days from the due date, as against 30 days in the case of exporters holding the Standard Policy.

Waiting period for claims:

The normal waiting period of 4 months under the Standard Policy has been halved in the case of claims arising under the Small Exporter’s Policy.

This scheme covers most of the risks faced by small exporters and provides them with the confidence of expanding their business aggressively.

The risks covered are as follows:-

Commercial Risks

  • Insolvency of the buyer
  • Failure of the buyer to make the due payment within a specified period, normally 2 months from the due date
  • Buyer’s failure to accept the goods, subject to certain conditions

Political Risks

  • Imposition of restriction by the Government of the buyer’s country or any government regulation which may block or delay the transfer of payment made by the buyer
  • War, Civil War, revolution or civil disturbances in the buyer’s country
  • New Import restrictions or cancellation of a valid import license
  • Interruption or diversion of voyage outside India resulting in payment of additional freight or insurance charges which cannot be recovered from the buyer
  • Any other cause of loss occurring outside India, not normally insured by general insurers, and beyond the control of both the exporter and the buyer

Terms of premium disbursement:

What are the terms of premium disbursement?

  • Minimum premium payable up to ₹2,000 with rates depending on the country to which exports are made and the period of repayment. This is valid for a period of 1 year.
  • Advance payment up to 20% balance to be paid on a quarterly basis in proportion to the amount of credit disbursed
  • ECGC will pay claims to the extent of 95% for losses due to commercial risks and 100% for losses due to political risks

Additional benefits:

  • Conversion of a D/P bill into DA bill, provided the SME has already obtained a suitable credit limit on the buyer on D/A terms.
  • For valuation up to ₹3 lakh, conversion of D/P bill into D/A bill is permitted even if credit limit on the buyer has been obtained on D/P terms only, but only one claim can be considered during the policy period on account of losses arising from such conversions.
  • Extension for due date of payment of a D/A bill provided that a credit limit on the buyer on D/A terms is in force at the time of such extension. 

Eligibility Criteria

What is the eligibility criteria for this scheme?

This scheme is issued to exporters whose anticipated export turnover for the period of one year does not exceed ₹5 crores.


How can an SME apply for this scheme?

To download the proposal form for a Small Exporter Policy, Click here


Are there any exclusions for this scheme? 

  • Commercial disputes including quality disputes raised by the buyer, unless the exporter obtains a decree from a competent court of law in the buyer’s country in his favor
  • Causes inherent in the nature of the goods
  • Buyer’s failure to obtain necessary import or exchange authorization from authorities in his country
  • Insolvency or default of any agent of the exporter or of the collecting bank
  • Exchange rate fluctuation
  • Failure or negligence on the part of the exporter to fulfill the terms of the export contract. Port authority (My of Commerce & Industry) 

Documents required

Which documents are required to apply for this scheme?

  • Completely filled in proposal form no. 121 along with minimum premium of ₹2,000 to be submitted to the ECGC
  • Confirmation with respect to acceptance of the premium rates in the form of a schedule given with the Proposal Form

For do’s and don’ts click here

For any further clarification on the scheme, click here.