Can Your EPCG Authorisation Still Claim the Average Export Obligation Relief for 2024-25?

DGFT Policy Circular 10/2025-26 lets RAs re-fix Average EO where a product group's exports fell over 5%. Check the annexure before you file discharge.

The question

Can your EPCG authorisation still claim the average export obligation relief for 2024-25, and what do you need to do before the RA will accept your discharge?

What changed

DGFT has operationalised the relief provision in para 5.17(a) of the Handbook of Procedures 2023 through Policy Circular No. 10/2025-26, dated 25 February 2026.

The circular directs all Regional Authorities to re-fix the Annual Average Export Obligation for EPCG authorisations for the financial year 2024-25, where the relevant sector or product group recorded a decline in total exports of more than 5% compared to 2023-24.

The relief is proportionate. If a product group's exports fell by, say, 9% in 2024-25 against 2023-24, the Average EO for that year may be reduced by 9%.

The annexure to the circular lists the qualifying product groups and their percentage declines. That annexure is the controlling document for eligibility.

Who it hits

The operative test is sector-level, not firm-level. An individual exporter does not need to show that its own exports declined. The entitlement flows from the product group's aggregate export performance. This means an EPCG holder whose own exports grew in 2024-25 may still benefit if the sector as a whole declined by more than 5%.

The circular is addressed to all Regional Authorities of DGFT and all Customs Authorities.

The re-fixation is to be done by the RA, not by the authorisation holder. The reduction, if any, must be endorsed in the licence file of the RA's office and in the amendment sheet issued to the EPCG authorisation holder.

The compliance trap

The first trap is the distinction between Average EO relief under para 5.17(a) and EO period extension under Public Notice 51/2025-26 dated 6 March 2026. These are separate reliefs with separate triggers.

Circular 10/2025-26 reduces the quantum of the Average EO for 2024-25. Public Notice 51/2025-26 extends the time within which the EO must be fulfilled, automatically extending the EO period or block-wise EO fulfilment period up to 31 August 2026 for specified Advance Authorisations and EPCG Authorisations expiring between 1 March 2026 and 31 May 2026, without any application or composition fee.

An authorisation holder that assumes the circular automatically extends its deadline, or that the public notice automatically reduces its EO quantum, will misstate its compliance position.

A second trap concerns duty drawback. Under the EPCG scheme, drawback is not available on the customs duty saved on capital goods imported duty-free. The relief under Circular 10/2025-26 does not change this. An EPCG holder that claims drawback on the duty-saved component while also seeking Average EO relief risks a demand for duty plus interest on the capital goods.

A third trap is procedural. The circular requires the RA to endorse the reduction in the licence file and issue an amendment sheet. If the authorisation holder proceeds to file for EO discharge or redemption without obtaining the amended licence, the RA may process the discharge against the original, unreduced EO. The burden is on the authorisation holder to ensure the RA has actually re-fixed the Average EO and issued the amendment sheet.

A fourth trap is the block-year mismatch. The circular re-fixes Average EO for 2024-25 only. If an authorisation holder's block-wise EO period spans multiple years, the relief applies only to the 2024-25 component. The remaining blocks must be fulfilled at the original Average EO unless a separate circular or notification provides relief for those years.

Practical sequence

For an EPCG authorisation holder with a 2024-25 block falling in a listed product group:

1. Obtain the annexure to Circular 10/2025-26 and confirm the product group.

2. Write to the RA requesting re-fixation of the Average EO for 2024-25 under Circular 10/2025-26, referencing the authorisation number and the product group.

3. Obtain the amendment sheet reflecting the reduced Average EO.

4. If the EO period expires between 1 March and 31 May 2026, separately note the automatic extension under Public Notice 51/2025-26.

5. File for EO discharge or redemption only after the amended licence is in hand. Do not claim drawback on the duty-saved capital goods component at any stage.

Open confirmations

• Confirm the exact product groups and percentage declines in the annexure to Circular 10/2025-26 against the primary PDF on the DGFT portal. The web notes do not reproduce the annexure.
• Confirm whether the authorisation holder's product group is listed in the annexure. The sector-level test means the authorisation holder must map its export product to the correct product group as defined in the annexure, not by its own internal classification.
• Confirm the date of the authorisation and the applicable FTP/HBP version. Para 5.17(a) of HBP 2023 applies to authorisations issued under FTP 2023; sub-paras (b) and (c) extend to FTP 2015-20 authorisations.
• Confirm whether the RA has actually re-fixed the Average EO and issued the amendment sheet. The circular directs RAs to act, but the authorisation holder should verify that the endorsement has been made in the licence file.

Primary sources

• Para 5.17(a) of the Handbook of Procedures 2023, read with FTP 2023, Chapter 5.
• Policy Circular No. 10/2025-26 dated 25 February 2026.
• Public Notice No. 51/2025-26 dated 6 March 2026.

Confidence

Verified: the circular exists, the 5% threshold is named, the relief is proportionate, and the RA must endorse the reduction in the licence file and issue an amendment sheet.

Interpretation: the sector-level test means an individual exporter's own export performance is not the trigger.

Needs confirmation: the exact product groups and percentage declines in the annexure, and whether any specific authorisation holder's product group is listed.

DGFT EPCG export obligation relief, Circular 10/2025-26, average export obligation 2024-25, EPCG amendment sheet, Public Notice 51/2025-26 EO extension.