India is on an ambitious journey to become a global manufacturing powerhouse. With initiatives like Make in India and Atmanirbhar Bharat, the country aims to increase its contribution to the global supply chain and reduce dependence on imports. However, manufacturers—especially import-heavy sectors—often struggle with high upfront costs, working capital blockage, and complex compliance requirements.

To solve these challenges, the Government of India introduced the MOOWR Scheme (Manufacturing and Other Operations in Warehouse Regulations). This single policy has emerged as one of the most powerful tools to boost domestic manufacturing competitiveness.

In this blog, we explore how MOOWR supports India’s manufacturing push and why more companies are adopting it in 2025 and beyond.

What Is the MOOWR Scheme? (Quick Overview)

The MOOWR Scheme, introduced under Section 65 of the Customs Act, allows businesses to:

• Import raw materials, components, and capital goods without paying upfront customs duty
• Conduct manufacturing or other operations inside a bonded warehouse
• Store goods for an unlimited period without interest
• Sell finished goods in both domestic and export markets
• Operate with zero export obligation, unlike SEZs or EOUs

In simple words, MOOWR gives manufacturers the freedom to defer duty payments and operate with minimal restrictions.

Why MOOWR Matters for India’s Manufacturing Growth

India wants to grow its manufacturing sector to USD 1 trillion by increasing local production, boosting exports, and attracting more global investors. But challenges like high import duties and slow compliance processes often hold businesses back. The MOOWR Scheme helps solve these issues by reducing costs for manufacturers, making it easier to access quality imported materials, creating a smoother business environment, and helping Indian products compete better globally.

10 Ways MOOWR Supports India’s Manufacturing Push

1. Duty Deferment Helps Reduce Costs

Under MOOWR, companies don’t pay customs duty upfront on:

• Raw materials
• Components
• Capital goods
• Machinery

Duty is payable only when goods are cleared into the domestic market, not during import.

This significantly lowers manufacturing costs and enables better pricing.

2. More Available Funds for Smooth Operations

One of the biggest challenges manufacturers face is blocked cash flow because they must pay import duties upfront. The MOOWR Scheme solves this by allowing zero duty at import, offering a deferred payment model, and charging no interest on duty payments. This improves liquidity, helping manufacturers scale production, plan their supply chain better, and invest more confidently in business growth.

3. No Export Obligation – Total Flexibility

Unlike SEZ or EOU schemes, MOOWR does not require exporters to meet any export targets.

Companies can:

• Sell 100% in the domestic market
• Export if they choose
• Switch between domestic and export markets freely

This flexibility attracts businesses focused on India’s growing consumer market.

4. Simple Setup & Low Compliance Burden

MOOWR is easy to adopt because:

• No geographical restrictions
• Quick approval process
• Simplified documentation
• No mandatory physical infrastructure requirements
• No need for GST refunds or duty drawback complexities

It is perfect for MSMEs and large-scale manufacturers alike.

5. Encourages Import of World-Class Machinery

High import duties on machinery discourage many companies from adopting advanced technologies.

MOOWR allows import of capital goods without upfront duty, making:

• Automation
• High-tech machinery
• Lean manufacturing
• Precision engineering

more affordable for Indian factories.

6. Boosts Sector-Specific Capabilities

MOOWR is especially beneficial for industries that rely on imported inputs, including:

• Electronics & semiconductors
• Automotive & EV components
• Pharmaceuticals & chemicals
• Aerospace & defense
• Plastics & polymers
• Engineering goods
• Textiles & garments
• Renewable energy components

These sectors gain cost efficiency, enabling India to build global-scale capabilities.

7. Enhances Supply Chain Localization Under Make in India

MOOWR encourages domestic value addition because companies can import inputs duty-free and manufacture locally.

This leads to:

• More factories choosing India as a production base
• Reduced dependence on finished goods imports
• Higher local sourcing and job creation

8. Attracts Foreign Investment Into Manufacturing

Global manufacturers look for flexible, low-risk environments when choosing where to set up operations. The MOOWR Scheme supports this by allowing free movement of goods, removing strict location restrictions, offering duty savings without complex conditions, and giving businesses greater operational freedom. Together, these benefits make India a more appealing destination for multinational manufacturing companies.

9. Boosts Export Competitiveness

By reducing production costs through deferred duties, the MOOWR Scheme helps manufacturers offer better pricing in global markets, enjoy higher export margins, and improve the overall competitiveness of Indian-made products. Exporters also benefit from SEZ-like duty savings, but without the limitation of operating in a specific zone, giving them much more flexibility.

10. Reduces Inventory Cost & Increases Operational Efficiency

With unlimited warehousing and no duty payment until clearance:

• Inventory can be stored longer
• Supply chain buffer stock becomes cheaper
• Manufacturers can manage global shortages better

This is especially useful in electronics, auto and pharma supply chains where material volatility is common.

How MOOWR Strengthens the Make in India Initiative

MOOWR supports India’s long-term manufacturing goals by attracting more manufacturers, reducing costs for new factories, and making it easier to use advanced machinery. It also helps MSMEs by improving their cash flow and allows companies to offer better, more competitive pricing. All these benefits work together to help India grow as a strong global manufacturing hub.

Quick Comparison: MOOWR vs SEZ vs EOU

How to Apply for the MOOWR Scheme (Simple Overview)

Step 1: Identify the manufacturing location or warehouse
Step 2: Submit an application to the jurisdictional customs officer
Step 3: Provide the required documents:

• GST certificate
• Warehouse layout
• Machinery list
• Bond and undertaking

Step 4: Customs inspection and approval
Step 5: Start operations with zero duty at import

Approval is typically fast compared to SEZ/EOU processes.

Conclusion

The MOOWR Scheme is transforming India’s manufacturing landscape by offering cost savings, operational flexibility, and global competitiveness. Whether you’re an MSME or a large enterprise, MOOWR reduces financial stress, improves supply chain efficiency, and supports long-term industrial growth.