Export assistance is also granted against specified sales of goods (Including supplies to EPCG licence holders) in India. Such sales are known as Deemed Exports. Payment for the goods is received by the supplier in Indian rupees, but such supplies may earn or save foreign exchange for the country. These supplies known as deemed exports are to be distinguished from physical exports which are sales outside the frontiers of the country.

Definition

The EXIM Policy defines deemed exports as "those transactions in which the goods supplied do not leave the country". Hence, the condition for "payment of the goods is made in India" as applicable upto March "99 is no longer applicable. But the goods supplied must have been manufactured in India.