EOU notes
EOU Scheme: History, Performance and Evaluation for Mains
Introduced in 1981 to complement Export Processing Zones, the EOU scheme let export units locate outside zones.
Timeline
| Year | Development |
|---|---|
| 1965 | Kandla Export Processing Zone, Asia's early EPZ |
| 1981 | EOU scheme introduced |
| 2000 | SEZ policy announced; EPZs converted to SEZs |
| 2005 | SEZ Act enacted (Rules 2006) |
| 2023 | Foreign Trade Policy 2023 retains EOU/EHTP/STP/BTP in Chapter 6 |
How to evaluate the scheme in a Mains answer
- Outcomes: export value, NFE, employment and backward linkages — not merely the number of units.
- Costs: revenue forgone through duty concessions and compliance burden.
- WTO consistency: export-contingent subsidies face scrutiny under the SCM Agreement.
- Competition from SEZs and duty-remission schemes such as RoDTEP.
- Reform: simpler compliance, digital monitoring and focus on value addition.
Model line: Export schemes should be judged by net value addition and jobs, not by the concessions they offer.
Study Library and practice
- Study Library: trade deficit and the external sector
- SEZ explainer: Act 2005, DTA and customs
- EOU vs SEZ quick explainer
- Take the EOU practice quiz
- Daily current-affairs quiz
Official references
FAQs
When was the EOU scheme introduced?
In 1981, to complement Export Processing Zones.
Why do WTO rules matter for EOUs?
Benefits contingent on export performance can be challenged as prohibited subsidies under the WTO SCM Agreement.