What is the definition of "Export Oriented Unit" EOU? Whether an EOU is opened exclusively for doing Export Transactions or it can also do Domestic Transactions?
Regards.
Devendra K
1 Replies
Akhil Sharma
(Service)
(141 Points)
Replied 10 November 2011
Dear Devendra,
The Export Oriented Unit (EOU) has been devised by the government of india to promote export. The advantage of an EOU is that they can import duty free hence become more competitive in the world market. The details of EOU is given under chapter 6 of foreign trade policy.
As the name suggests it is meant for export but an EOU can also sell domistically to the extent of 50% of the net foreign exchange (NFE) generated in the previous year. The catch is it can sell only those products domestically which it has been exporting.
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