Service Exports from India Scheme (SEIS): What Indian Exporters Need to Know

India’s service sector contributed more than 54% to the country’s GDP in 2023 to 24, driven by IT, tourism, healthcare, creative services, and professional sectors. To strengthen this growth, the government introduced several export promotion measures over the years. One of these was the Service Exports from India Scheme (SEIS), which rewarded service exporters with duty credit scrips until its discontinuation in 2020.

Today, with no direct replacement scheme in place, understanding SEIS’s historical framework and the current policy environment is useful for exporters navigating global markets.

What Was the Service Export from India Scheme (SEIS)?

SEIS was part of India’s Foreign Trade Policy 2015 to 20, designed to improve global competitiveness by rewarding service exporters located in India. Eligible exporters received duty credit scrips based on their net foreign exchange earnings from notified services. These scrips were transferable, usable for selected duty payments, and issued electronically through the DGFT system.

What the scheme rewarded

1. Mode I: Cross border supply (services delivered from India to overseas clients)
2. Mode II: Consumption abroad (services provided in India but consumed abroad)

Eligible sectors included IT and ITES, tourism, hospitality, medical services, professional services, logistics, education, and others listed in FTP appendices 3D and 3E.

Objectives and Evolution of the Scheme

SEIS aimed to increase India’s share in global services trade by reducing exporters’ operational costs. It evolved from the earlier Served from India Scheme (SFIS), expanded coverage, simplified procedures, and was positioned to reduce direct subsidy exposure.

Understanding Duty Credit Scrips

Duty credit scrips were government issued certificates with a fixed monetary value, issued electronically through the DGFT portal after application processing.

Key characteristics

1. Transferable, meaning they could be sold to other importers
2. Validity period of 18 months from the issue date
3. Usable for paying Basic Customs Duty on imports, with exceptions as notified by policy
4. Electronic format reduced paperwork and improved processing speed

Scope and Applicability of SEIS

The scheme applied to service providers located in India supplying eligible services to foreign clients. SEIS operated for financial years 2015 to 16 through 2019 to 20, with applications accepted for services rendered during this period.

Both companies and individual professionals could claim benefits if they met eligibility criteria.

What Were the Eligibility Criteria for SEIS Benefits?

To qualify for SEIS benefits, service exporters had to meet DGFT prescribed conditions to claim duty credit scrips.

Note: Although SEIS is discontinued, exporters with pending claims should review their DGFT dashboard and follow the process available with the Regional Authorities as permitted under the relevant policy circulars.

Minimum net foreign exchange earnings thresholds

Minimum net foreign exchange requirement was:

1. USD 15,000 annually for companies
2. USD 10,000 for individuals and sole proprietors

NFE formula:
NFE = Gross foreign exchange earnings minus foreign exchange expenses

Only confirmed foreign currency receipts were counted, though some sectors had deemed foreign exchange provisions.

Mandatory Import Export Code (IEC)

An active 10 digit Import Export Code was mandatory during the service period and application process. The IEC linked export transactions and enabled DGFT tracking.

Eligible service categories and modes of supply

DGFT notified eligible service sectors under appendices 3D and 3E, including:

1. Information Technology and IT enabled services
2. Tourism and hospitality services
3. Medical and healthcare services
4. Professional services such as legal, accounting, architectural
5. Educational services
6. Transport and logistics

Mode I and Mode II qualified for benefits. Mode IV generally did not qualify.

Excluded foreign exchange receipts

These inflows did not qualify for NFE calculation:

1. Equity or debt participation receipts
2. Donations and grants
3. Loan repayments or interest receipts
4. Sale of goods (covered under separate schemes)
5. Receipts unrelated to eligible service exports

How Were SEIS Incentives Calculated and Utilised?

Once eligibility was met, benefits were calculated using category based percentage rates applied on net foreign exchange earnings.

Calculating net foreign exchange earnings

Exporters needed records of all foreign exchange transactions. Bank realisation certificates and Foreign Inward Remittance Certificates were primary evidence.

For sectors with deemed foreign exchange provisions, DGFT notifications defined qualifying transactions. This was relevant in sectors such as tourism, where spending by foreign tourists in India could be treated as eligible in specific cases.

Applicable reward rates by service category

SEIS historically offered different reward rates by category, commonly:

1. High priority services: 7%
2. Standard services: 5%
3. Other eligible services: 3%

These rates applied to net foreign exchange earnings, not gross receipts. DGFT could revise rates through policy changes.

Permitted uses of duty credit scrips

1. Payment of Basic Customs Duty on selected imports
2. Payment of excise duty on domestic procurement (during the pre GST period)
3. Payment of service tax (until GST implementation)
4. Transfer or sale to other importers

In some situations, revalidation could be allowed through DGFT applications, subject to rules applicable at the time.

What Was the Application Process for SEIS Benefits?

DGFT digitised the process through its online portal.

Prerequisites for application

1. Active IEC during the entire service period
2. Meeting minimum NFE threshold (USD 15,000 for companies, USD 10,000 for individuals)
3. Services listed in the eligible appendices with correct mode classification

Missing prerequisites could lead to rejection, though DGFT allowed representations in certain cases.

Online application on the DGFT portal

1. Log in using IEC credentials and Digital Signature Certificate
2. Go to Services and locate the SEIS application section
3. Fill ANF 3B with applicant details and service information
4. Upload invoice wise foreign exchange earnings data
5. Attach supporting documents
6. Submit to the jurisdictional Regional Authority

DSC or Aadhaar based e Sign was required for authentication. The system generated an application number for tracking.

Key documentation and deadlines

Common documents included:

1. Bank Realisation Certificates or e BRC from authorised dealers
2. Foreign Inward Remittance Certificates
3. CA or CS certified statement of foreign exchange earnings and expenses
4. Service agreements or contracts, where applicable

Applications were typically required within 12 months of the relevant financial year end, as per scheme timelines applicable then.

Why Was SEIS Discontinued?

The government discontinued SEIS from 1 April 2020. The decision reflected a broader shift in export promotion strategy and ongoing alignment with international trade rules.

Government rationale and cost benefit view

The government assessed that service exports were growing due to market factors and India’s competitive strengths, and that incentive outlay did not justify continuation at the same scale.

Impact on service exporters and industry bodies

Reactions varied. Smaller exporters and freelancers felt the impact more sharply than large firms. Industry bodies and committees also flagged the lack of a direct replacement for services.

Comparison with MEIS and RoDTEP

MEIS for goods also ended, but goods exports moved to RoDTEP, which focuses on refunding embedded duties and taxes on exported products. Service exporters did not receive a similar replacement mechanism.

Beyond SEIS: The Current Landscape for Indian Service Exporters

Without duty credit scrips, exporters now focus on efficiency, pricing discipline, and payment optimisation.

Absence of a Direct Incentive Scheme

There is currently no dedicated incentive scheme that directly replaces SEIS for service exporters. Industry bodies have suggested a services equivalent mechanism, but there has been no confirmed rollout.

Challenges in International Payment and Forex Management

Common issues that can affect profitability include:

1. Transaction fees through traditional channels
2. Forex conversion charges reducing net receipts
3. Settlement delays affecting cash flow
4. Manual follow ups for FIRC generation
5. Purpose code confusion causing compliance questions

These challenges are harder for freelancers and small businesses without dedicated finance teams.

Other Forms of Government Support and Industry Initiatives

While direct incentives are absent, other support may include:

1. Market development assistance for international events
2. Export Promotion Council support for market intelligence
3. Skill development programmes for service quality improvements
4. Digital infrastructure improvements that reduce operational friction

Private sector solutions also address pricing transparency and compliance automation.

How Razorpay MoneySaver Export Account Empowers Indian Service Exporters

Razorpay MoneySaver Export Account helps service exporters manage international payments more efficiently through technology driven workflows.

Key points covered in this draft include:

1. Lower cost compared to traditional banking channels in many cases
2. Smart local account setup in key markets to reduce transfer friction
3. Automated Digital FIRC to simplify compliance
4. RBI aligned onboarding and compliance workflows
5. Reduced manual processes and fewer hidden forex charges

Conclusion

SEIS supported India’s service exporters by offering duty credit scrips on net foreign exchange earnings. Its discontinuation from April 2020 marked a shift toward an efficiency driven export environment.

With no direct replacement scheme, exporters increasingly focus on operations, cost control, and payment setups that simplify compliance and reduce forex losses. This is pushing service exporters to build leaner and more resilient global businesses.

FAQs

1. Is the Service Exports from India Scheme (SEIS) still active?

No. SEIS was discontinued from 1 April 2020, and the government has not introduced a direct replacement.

2. What was the main purpose of SEIS?

It aimed to promote service exports by granting duty credit scrips to eligible exporters based on their net foreign exchange earnings.

3. How were duty credit scrips used?

They were transferable and could be used to pay Basic Customs Duty, and in the pre GST period, certain domestic duties and service tax as permitted.

4. Were all service categories eligible?

No. Only services listed in the Foreign Trade Policy appendices were eligible, and DGFT issued updates periodically.

5. What replaced SEIS?

There is no direct replacement for service exporters at present.

6. How did SEIS help exporters compete globally?

It reduced specific cost components, which could improve pricing and margins for eligible service exporters.