The Export Oriented Unit (EOU) Scheme, which had been introduced in the early 1980s remains in the

forefront of countrys export production schemes. The scheme has witnessed many changes over the last twenty-four years in the context of ever changing economic realities. However, the basic premise remains the same. This premise is that the exporters are treated as a special class and given the required tariff, non-tariff and policy support to facilitate their export efforts. Thus, today the EOU Scheme has emerged as a dynamic policy initiative facilitating the exporting community in the task of increased exports. The EXIM Policy, 2002-07 reinforces the importance of Scheme in chapter 6 of the policy. Appendix 14 I of the Handbook of procedures (Vol.1) as amended upto 28- 1-2004 sets out the procedures and benefits of this scheme.
100% EOUs fall into 3 categories

(a) EOUs established anywhere in India and exporting 100% products except certain fixed percentage of sales in the Domestic Tariff Area (DTA) as may be permissible under the Policy. (b) Units in Free Trade Zones in Special Economic Zones (SEZs) and exporting 100% of their products. (c) EOUs set up in Software Technology Parks (STPs) and Electronic Hardware Technology Parks (EHTPs) of India for development of Software & Electronic Hardware.