An Export Promotion Mission will be established integrating all stakeholders… Current accounts deficit will be brought down aggressively by focusing on exports and reducing the dependency on imports.

The 2014 manifesto's export commitment is about machinery rather than a number: "An Export Promotion Mission will be established integrating all stakeholders." Alongside it sits the purpose — bringing the current account deficit down "by focusing on exports and reducing the dependency on imports."

Integration is the checkable word. India's main export-promotion instrument for capital goods is the Export Promotion Capital Goods scheme, and it is administered jointly by two departments: the Directorate General of Foreign Trade issues the licence, and the Central Board of Indirect Taxes and Customs allows the duty-free import and records the exports made against it. Whether those two work as one system is precisely what the manifesto promised, and precisely what the CAG audited.

The report was tabled on 17 December 2024 and covers 2018-19 to 2020-21, when 34,777 authorisations carrying ₹42,714 crore of foregone duty were issued against ₹2,49,137 crore of exports under the scheme.

Its central number concerns the bargain at the heart of the scheme — duty-free machinery now, exports later. "As per the data furnished by the DGFT, 1,08,798 authorizations whose Export Obligation Period (EOP) expired remained unredeemed till the end of March 2021." More than a lakh licences where the deadline had passed and no discharge had been recorded.

Part of the explanation is that the licensing system does not track its own product. The audit found that while the directorate's system records issuance, "the data on utilization of authorizations viz., details of the Capital Goods (CG) imported/Duty Saved are not captured in the new system", so "the status of actual utilization of authorizations is not known to RA till the Authorization Holders submits Installation Certificate (IC)/EODC application." The licensing authority learns what a licence was used for only when the holder chooses to tell it.

On the coordination the promise named, the audit's language is direct. The customs module that should block imports beyond the duty saved value goes unwatched at both ends: "Non-monitoring of excess imports by both Customs and DGFT indicates weak institutional mechanism between two Departments in exchange of information and coordinated action against the non-compliant firms." The message exchange system between them "was not fully functional in all the RA offices and the old practice of manual communication was still continued".

Controls at the front door were weak too. The online application process, introduced under ease of doing business, "do not check the veracity of the documents submitted, but only prompts to upload the documents" — and "even if some of the mandatory documents are not uploaded, the system is accepting the application". Authorisations were issued without the supporting manufacturer's endorsement or a description of the export product, and even after the November 2020 move to a centralised system, "authorizations beyond the delegated financial powers are being issued."

At the exit, discharge was granted too easily. Extensions of the export obligation period "were granted in a routine manner without any reasonable assurance in the form of export orders, purchase contracts, block-wise obligation met, filing of annual returns". Discharge certificates were issued "without verifying actual user condition, on export of ineligible items (not available in authorization), ineligible SBs, non-fulfillment of AEO/SEO" — and the same shipping bills were counted against two different obligations. The deterrent mechanism, the Denied Entity List, was blunted by abeyance orders "issued without recording any reasons", with no cap on how many an exporter may receive and no standard procedure for granting them.

One limit on the audit's own work is worth recording. Of 4,450 sampled cases, "214 authorizations files with DSV value of ₹2,225.22 crore pertaining to 12 RAs… were not produced for audit, despite repeated requests/reminders."

India's exports grew over this period, and this audit does not measure that. What it measures is whether the export-promotion machinery works as an integrated system, which is what the 2014 promise undertook to build. On that record — a lakh of expired unredeemed licences, a licensing system blind to its own imports, and two departments each assuming the other is watching — our verdict is lacks context.