Indian companies engaged in manufacturing, exports, and imports are always in pursuit of ways to reduce costs, save working capital, and enhance efficiency. One such scheme that has drawn huge interest in recent years is the MOOWR scheme. The Indian Government has introduced it into force to facilitate manufacturers and exporters to compete globally through tax relief and operational flexibility.
What is MOOWR?
MOOWR Full form is Manufacturing and Other Operations in Warehouse Regulations. It's an initiative that fell under the Customs Act, 1962 with the Union Budget 2019.
The MOOWR facility allows companies to import raw materials, components, and capital goods into a customs warehouse without paying customs duty upon import. If the resulting product is eventually exported, no customs duty is ever paid. If the goods are sold locally, customs duty is paid upon clearance of the goods.
In simple terms:
- Import duty-free at the border.
- Pay only when selling domestically.
- No duty whatsoever on exports.
This makes the manufacturing and other operations in warehouse scheme one of the most cost-efficient and versatile customs schemes available in India.
Key Features of MOOWR Scheme
- Deferred Duty– No need to pay customs duty while importing raw materials or machinery. Duty is withheld until goods are cleared for domestic use.
- No Export Obligation – Unlike schemes such as EPCG or Advance Authorization, MOOWR does not necessarily force you to export.
- Duty-Free Exports – The exports from the bonded warehouse are free from customs duty in full.
- Operation Flexibility – Production, assembly, testing, repair, or any other operation permissible can be done inside the warehouse.
- No Expiry Date – A MOOWR license will not expire if the unit is continuing to meet customs requirements.
Motive Behind the MOOWR Scheme in India
The government launched the MOOWR scheme with the motive of creating a strong manufacturing environment in India. It aligns with Make in India and Ease of Doing Business.
The primary motives are:
1. Increasing Local Production – By minimizing initial duty costs, the program encourages companies to manufacture products in India rather than importing finished items.
2. Encouraging Exports – Since exports are duty-free, Indian manufacturers can price their products more competitively in foreign markets.
3. Reducing Burden on Working Capital – Import duty payment is postponed, freeing up capital for business working needs as well as investment.
4. Foreign Investment Attraction – Multinational companies setting up factories in India have cost advantages, thus positioning India as a favored manufacturing hub.
5. A Simple Compliance – Having no requirement of stringent export within a specified deadline, the scheme is easy to carry out compared to other incentive schemes.
Overall, the motive was to reduce cost liabilities, attract investment, and position India as an international manufacturing and export hub.
Eligibility for MOOWR
Any business is qualified for a MOOWR license:
- Anyone doing manufacturing or related operations in India is eligible for MOOWR.
- Existing units along with new units can apply.
- Minimum investment is not required.
- Sectors such as electronics, automobiles, pharmaceuticals, chemicals, and engineering are particularly benefited.
How Does the MOOWR Scheme Work?
2. Your premises are officially declared a bonded warehouse after approval.
3. Import raw materials and machinery without paying duty in advance.
4. Manufacture or undertake other authorized activities in the warehouse.
5. If export of finished goods → No duty on customs.
6. If sold within India → Pay duty (with interest) at the time of clearance.
This simple mechanism gives a big relief to businesses that otherwise struggle with blocked working capital.
Benefits of the MOOWR Scheme
1. Enhanced Cash Flow – No prepayment duty guarantees better liquidity for business.
2. No Export Condition – You have the freedom to sell at home or outside free from any restriction.
3. Duty-Free Exports – Indian goods become competitive in the international market.
4. Easy Compliance – The MOOWR scheme notification prescribes easy rules, in contrast to complex export-based schemes.
5. Limitless Warehousing – Imported goods can be warehoused for any length of time.
6. Manufacturing Support – Makes production cheaper and boosts the "Make in India" movement.
Procedure to Obtain MOOWR License
MOOWR license application involves the following steps:
1. Filing of Application – Submit the form and firm papers (incorporation certificate, premises diagram, GST, PAN, IEC).
2. Customs Inspection – The premises are inspected by the authorities and suitability is decided.
3. Execution of Bond – Bond for duty liability is executed.
4. Approval – Warehouse is notified as a bonded facility.
5. Commencement of Operations – Unit can now import products free of duty and start manufacturing.
Compliance under MOOWR
While simple, the MOOWR scheme customs compliance rules must be followed:
- Keep accurate records of import, manufacture, and clearances.
- File regular returns (monthly).
- Allow checking by customs officers when required.
- Pay duty on time for local clearances.
MOOWR Scheme Notification
How SKMC Global Can Help You?
- Eligibility Check – Assessment of whether your business qualifies.
- Application Assistance – Preparation and submitting of the MOOWR license application.
- Warehouse Setup – Support to set up and operate a bonded warehouse.
- Compliance Services – Record maintenance, return preparation, and support in audits.
- Strategic Advice – Helping you plan operations to maximize MOOWR benefits.
With our experience, you can have smooth approvals and focus on business while we manage compliance.
Conclusion
The MOOWR scheme is amongst the most trade-friendly bespoke schemes in India today. It reduces the cost of production and frees up working capital by deferring customs duty, without export obligations, and with strong compliance.
The government's objective was straightforward – to increase Indian manufacturing, bring in investment, ease exports, and make India a stronger participant in the supply chain worldwide.
If you are importing raw materials, parts, or capital goods for business, getting a MOOWR license can be a game-changer. To make it easy for you, working with experienced MOOWR scheme consultants like SKMC Global means you get to enjoy all the benefits without the hassles of complicated compliance.
At SKMC Global, we guide you through the process – application to operations – so that you can concentrate on business growth while we look after the regulatory part.
FREQUENTLY ASKED QUESTIONS
The MOOWR scheme allows import of raw materials, components, or capital goods into a bonded warehouse without upfront payment of customs duty/IGST. Duty is payable only when goods are cleared for domestic use, while exported products remain duty-free.
Only applicants holding or applying for a warehouse license under Section 58, with permission for manufacturing and other operations in warehouse under Section 65, are eligible.
The applicant files an application with the Principal Commissioner/Commissioner of Customs, submits required undertakings, input-output norms, executes a bond, and provides digital accounts format as per MOOWR scheme notification.
The MOOWR license remains valid as long as the licensee maintains compliance with the MOOWR scheme rules.
A bond ensures payment of customs duty/IGST on domestic clearance and guarantees compliance with warehousing, manufacturing, and record-keeping obligations.
The warehouse keeper must have experience in customs warehousing and obtain a digital signature for electronic filings under the Information Technology Act, 2000.
Warehouses must have clear signage, computerized accounting systems, secure storage, and access controls to facilitate compliance with MOOWR scheme customs inspections.
The licensee must verify quantities, endorse bills of entry or transfer forms, retain copies, and report discrepancies to the bond officer within 24 hours.
Yes, but customs duty and IGST must be paid at clearance, with accurate records of consumption, wastage, and production maintained.
Yes, machinery and equipment can be imported without upfront duty if used for manufacturing or other operations in the warehouse.
The licensee must maintain digital and physical records of all goods, operations, samples, and documents for at least five years, including offsite backups, and submit monthly digital returns to customs.
Warehouse ledger/stock records, MOOWR license copy, bond documentation, and invoice or challan of goods being cleared.
The licensee must file a monthly return detailing receipt, storage, operations, and removal of goods within ten days of month-end to the bond officer.
Resultant goods can be cleared by filing a bill of entry for home consumption and paying applicable customs duties, IGST, fines, or penalties. All removal records and bill copies must be retained for audit.