Export-oriented unit
Also called: EOU, 100% EOU · Topic: Industrial Policy, Public Sector, MSMEs and Disinvestment · NCERT: Beyond NCERT
Meaning
An export-oriented unit (EOU), also called a 100% EOU, is a firm that promises to export its entire output, apart from domestic sales the rules permit. In return, it gets duty-free inputs and other concessions. Unlike a firm in an export zone, an EOU can be set up anywhere in India. So a firm can be near its raw materials or skilled workers and still get export benefits. The scheme began in 1981.
Example
A granite-processing unit in Karnataka sits near its quarries rather than in any zone. It registers as an EOU, imports its cutting machinery and consumables duty-free, and exports all its polished slabs.
Don't confuse with
- Export processing zone (EPZ) / special economic zone (SEZ): These are designated areas where many firms get benefits by locating inside them. An EOU gets similar benefits as a single unit, wherever it is located.
Related concepts
- Labour-intensive industrialisation
- Production-linked incentive
- Phased manufacturing programme
- Design-linked incentive
- Contract manufacturing
- Special economic zone
- Export processing zone
- Eight core industries