BIS Scheme X Scrapped: Impact on EPCG Licence Holders (2026)

On January 14, 2026, the Government of India officially announced that BIS Scheme X (under the Machinery & Electrical Equipment Safety – Omnibus Technical Regulation, 2024) is no longer required. The OTR Order has been formally withdrawn. This has direct and significant implications for businesses holding or planning EPCG Licences. Read on to understand exactly what has changed and what action you need to take.

1. What Was BIS Scheme X?
BIS Scheme X was a mandatory product certification framework introduced by the Bureau of Indian Standards (BIS) under the Ministry of Heavy Industries. It was created as part of the Machinery and Electrical Equipment Safety (Omnibus Technical Regulation – OTR) Order, 2024, notified on August 28, 2024 via Gazette Notification.

The scheme was designed to bring machinery and electrical equipment — primarily falling under HS code chapters 84 and 85 — under a standardised BIS conformity assessment framework before they could be manufactured, imported, or sold in India.

In plain terms: any capital goods machinery — pumps, compressors, cranes, construction equipment, transformers, motors, and hundreds of other industrial products — would have needed a BIS Scheme X certification before clearing Indian customs.

Products Covered Under Scheme X (OTR) Included:
• Industrial pumps (HS 8413xx series)
• Compressors and vacuum pumps (HS 8414xx)
• Centrifuges and filtering equipment (HS 8421xx)
• Cranes and lifting equipment (HS 8426xx)
• Construction machinery – bulldozers, excavators, road rollers (HS 8429–8431xx)
• Transformers, electric motors, generators (HS 85xx)
• Hundreds of other industrial machinery categories

2. Why Was BIS Scheme X Scrapped?
The Government’s decision to withdraw BIS Scheme X was not taken lightly. Several systemic issues made full implementation untenable:

Infrastructure Gaps
India lacked enough BIS-recognised testing laboratories to handle the sheer volume of machinery categories covered. Without adequate testing facilities, thousands of manufacturers and importers would have been blocked even if they wanted to comply.

Incomplete Standards Framework
Scheme X referenced product-specific Indian Standards (IS codes) for safety certification. However, for a large number of machine categories, these Type C (product-specific) safety standards had not yet been finalised by BIS. Granting or processing applications without complete standards was not feasible.

Industry-Wide Pushback
Manufacturer associations, import bodies, and industry councils consistently raised concerns at every Technical Committee meeting. The scale of the transition — covering thousands of machinery variants across dozens of sectors — was simply too broad for a phased rollout under the existing framework.

Ease of Doing Business Concerns
A Niti Aayog-led panel and broader policy signals from the Government emphasised reducing compliance burdens on MSMEs and importers of capital goods and raw materials. The withdrawal of BIS Scheme X fits squarely into this broader deregulatory direction.

3. Direct Implications for EPCG Licence Holders
This is where the biggest practical impact is felt. The Export Promotion Capital Goods (EPCG) scheme, governed by DGFT under Chapter 5 of the Foreign Trade Policy, allows exporters to import capital goods at zero customs duty against an export obligation of 6 times the duty saved, to be fulfilled within 6 years.

Here is how the withdrawal of BIS Scheme X directly changes the compliance landscape for EPCG licence holders:

A. BIS Scheme X Certificate No Longer Required at Import
Under the earlier regulatory framework, machinery covered under OTR/Scheme X would have required a valid BIS Scheme X certification before customs clearance — even for EPCG imports. With BIS Scheme X withdrawn, this pre-import certification requirement is no longer applicable for the products that were exclusively covered under OTR.

Practical Impact: Importers using EPCG licences to import machinery such as pumps, compressors, cranes, and industrial equipment no longer need to factor in BIS Scheme X compliance lead time (which could take 6–12+ months) before shipment.

B. Faster Customs Clearance for Capital Goods
One of the most significant bottlenecks anticipated under BIS Scheme X was customs hold-ups at ports of entry. BIS certification is a pre-import requirement — goods without the certification could not have cleared customs. With the scheme withdrawn, importers using EPCG authorisations can now proceed without this additional regulatory gate.

C. Removal of the “BIS Compliance Cost” from EPCG Planning
BIS Scheme X certification involved factory inspections (for Indian manufacturers), testing at BIS-recognised labs, documentation, and fees. For foreign manufacturers supplying capital goods to Indian EPCG holders, appointing an Authorised Indian Representative (AIR) and undertaking the full certification process was an added cost and delay. This cost and time burden is now eliminated.

D. Nexus Certificate and Chartered Engineer Certificate Remain Unchanged
The core EPCG compliance requirements remain fully intact. The Chartered Engineer Certificate (in Appendix 5A format) establishing nexus between the capital goods and the export product remains mandatory. The withdrawal of BIS Scheme X does not affect this requirement in any way.

E. Export Obligation Obligations Remain — With Fresh Relief
The fundamental EPCG export obligation structure is unchanged — 6 times the duty saved in 6 years, with block-wise fulfilment requirements. However, separately, in March 2026, DGFT issued a public notice extending the Export Obligation (EO) period for EPCG authorisations expiring between March 1, 2026 and May 31, 2026 automatically up to August 31, 2026, in view of geopolitical disruptions to global supply chains. This is a separate relief measure running in parallel.

F. Existing BIS Certifications (Scheme I / CRS) Still Apply
It is critical to note: only BIS Scheme X under the OTR has been withdrawn. Other BIS certification requirements remain fully in force. Products already regulated under BIS Scheme I (ISI Mark) or BIS Scheme II (CRS Registration — mandatory for electronics, IT products, etc.) continue to require their respective certifications. EPCG imports of such products must still comply with applicable BIS norms.

4. What This Means for Pending BIS Scheme X Applications
If your company had already initiated a BIS Scheme X application process — whether as an Indian manufacturer or as a foreign manufacturer via an Authorised Indian Representative — here is the guidance:

• Applications already submitted will continue to be processed as per BIS procedures, but since mandatory enforcement is withdrawn, there is no business-critical urgency to obtain the certificate at present.
• Investments already made in testing, documentation preparation, and lab fees may not be immediately wasted — BIS Scheme X certification, if obtained voluntarily, can still serve as a quality signal.
• However, no business should now plan timelines or investments around Scheme X as a compliance prerequisite for importing or selling in India until a new notification is issued.
• Monitor the official Gazette for any fresh notification specifying a new enforcement date. The withdrawal is currently open-ended — the government has not committed to reintroducing the scheme.

5. What Remains Unchanged for EPCG Holders
To avoid confusion, here is a clear summary of what the BIS Scheme X withdrawal does NOT affect:

• EPCG Scheme eligibility, application process (ANF 5A via DGFT portal), and licensing structure — fully unchanged.
• Zero customs duty benefit on capital goods imports under EPCG — unchanged.
• Export Obligation quantum (6x duty saved in 6 years) and block-wise EO fulfilment requirements — unchanged.
• Nexus Certificate / Chartered Engineer Certificate requirement — unchanged.
• Registration of EPCG authorisation with jurisdictional Customs Authority and bond/BG execution — unchanged.
• BIS Scheme I (ISI Mark) obligations for products covered under existing QCOs — unchanged.
• BIS CRS (Scheme II) obligations for electronics, IT goods, consumer products — unchanged.
• Redemption process (ANF 5C / ANF 5B) and EODC issuance — unchanged.

6. Action Checklist for EPCG Licence Holders
Based on this update, here is a practical checklist for businesses managing EPCG licences:

• Review your capital goods import plans: Remove BIS Scheme X compliance from your pre-import checklist for OTR-covered machinery (pumps, compressors, cranes, construction equipment, motors, etc.).
• Verify if your product requires other BIS certifications: Check whether your machinery falls under existing Scheme I or Scheme II QCOs separately — these are unaffected.
• Reassess import timelines: With the 6–12 month Scheme X certification bottleneck removed, your capital goods procurement and delivery schedules may be accelerated.
• Check EPCG EO status: If your EPCG authorisation expires between March 1 – May 31, 2026, note that DGFT has auto-extended the EO period to August 31, 2026 without composition fee.
• Maintain documentation hygiene: Continue maintaining all EPCG records for audit — installation certificates, export shipment records, and EO fulfilment documentation.
• Stay alert for fresh OTR notification: The Government may re-notify a revised implementation date for OTR/Scheme X in the future once testing infrastructure and standards are ready. Subscribe to DGFT and Ministry of Heavy Industries notifications.

7. Broader Policy Context
The scrapping of BIS Scheme X is part of a wider regulatory recalibration underway in India’s trade and standards policy. In late 2025 and early 2026, the Government also:

• Rescinded multiple QCOs for chemicals including aluminium, copper, nickel, tin, refined zinc, and viscose staple fibres.
• Deferred enforcement of several steel product standards under the Steel and Steel Products QCO 2024.
• A Niti Aayog-led panel (chaired by Rajiv Gauba) recommended pausing upcoming QCOs and OTRs for raw materials and capital goods pending inter-ministerial review.

The overarching direction is clear: quality standards remain a non-negotiable long-term goal, but the government is taking a more calibrated, infrastructure-first approach to implementation rather than forcing compliance before adequate testing and certification ecosystems are in place.

Conclusion
For Indian exporters and EPCG licence holders, the withdrawal of BIS Scheme X is unambiguously positive news in the near term. The anticipated compliance barrier to importing capital goods — particularly heavy machinery, industrial equipment, and electrical systems — has been removed for now.

However, this is not a permanent policy reversal. Businesses should treat this as a temporary reprieve and use the window to:

• Accelerate planned capital goods imports under EPCG without BIS Scheme X delays.
• Fulfil Export Obligations on existing authorisations, leveraging the DGFT EO period extension where applicable.
• Prepare internal compliance frameworks for a future re-notification of OTR/Scheme X requirements.