How India's EMI Scheme Helps Your Cash Flow

India’s EMI Scheme: How Deferred Customs Duty Improves Cash Flow

Pay the same duty, just at a better time. Here is what Indian manufacturers need to know.

If you import raw materials into India, you know how it goes. The container reaches the port, and before you can take your goods out, you have to pay customs duty. That money leaves your account weeks before your finished product earns anything. For many manufacturers, this gap squeezes working capital.

The Eligible Manufacturer Importer (EMI) scheme was created to ease that pressure. And on September 16, the Central Board of Indirect Taxes and Customs (CBIC) encouraged more manufacturers to start using it.

What Is the EMI Scheme?

The EMI scheme was announced in the Union Budget 2026-27. It allows approved manufacturers to clear imported goods without paying customs duty at the time of clearance. Instead, they pay the duty on a monthly basis under the Deferred Payment of Import Duty Rules, 2016. Earlier, deferred customs duty payment was mainly for AEO T2 and T3 companies. Now more compliant manufacturers can use it.

Here are the key points:

• The facility is available from April 1, 2026 to March 31, 2028.

• Applications are made online on the AEO India portal (aeoindia.gov.in).

• It is open to manufacturers who meet customs, GST, turnover and financial conditions, including AEO-T1 companies.

• EMI status works across all customs stations, so duty from different ports and ICDs can be paid together each month.

Why Is CBIC Pushing It Now?

The response so far has been slow. Fewer than 1,000 businesses joined the scheme after it launched in April. To fix this, CBIC simplified the application process from September 15. The number of documents an applicant has to upload came down from 10 to just 3. With less paperwork, CBIC hopes more manufacturers will apply.

The Important Part: Your Duty Does Not Go Down

This is where many importers get confused. Deferred payment does not reduce your import duty. The duty rate stays the same, and the amount you pay stays the same. The only thing that changes is when you pay.

Here is a simple example. Say you import machine parts and the total duty comes to ₹10 lakh. Normally, you pay that ₹10 lakh at the port before release. Under the EMI scheme, the goods go straight to your factory, and you pay the same ₹10 lakh by the monthly due date. In the meantime, that money can be used to buy materials, pay salaries or cover freight bills.

How It Helps Your Working Capital

• Faster clearance: goods do not sit at the port waiting for duty payment.

• Less borrowing: you may not need a short-term loan just to pay duty upfront.

• Simpler payments: one monthly payment instead of many separate ones across ports.

• Better timing: your duty payment moves closer to the time your sales money comes in.

Model Both Cost and Timing Before You Import

Before any shipment, a smart importer asks two questions. First, what will this shipment really cost me? That is your landed cost: product price, freight, insurance, customs duty and port charges added together. Second, when will each of these payments leave my account? The EMI scheme changes the answer to the second question, not the first.

This is where the Atmavaan Tariff Simulator in Atmavaan Workspace helps. You can estimate the duty and full landed cost of a shipment before it ships, then plan your payment dates around it. Since the duty rate depends on the correct HS code, our HS Code Classification tool helps you get that part right first.

Is the EMI Scheme Right for You?

If you manufacture in India, import regularly and have a clean compliance record, it is worth checking. Just remember that on-time payment is a must. If duty is not paid, CBIC can suspend or cancel your EMI status.

Want help planning your next import? Talk to the Atmavaan customs clearance team, or run your numbers on the Tariff Simulator today.