Service Export from India Scheme (SEIS): Boosting India's Service Exports

Introduction

The Service Export from India Scheme (SEIS) is a crucial component of India's foreign
trade policy aimed at promoting and incentivizing the export of services from the
country. Launched by the Government of India, SEIS is part of a broader strategy to
boost India's service sector, enhance foreign exchange earnings, and contribute to
the nation's economic growth. This paper provides a comprehensive overview of
SEIS, its objectives, benefits, and impact on India's service export industry.

Background

The SEIS was introduced as part of the Foreign Trade Policy (FTP) by the Directorate
General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry. The
FTP sets the framework and guidelines for SEIS, outlining the eligibility criteria,
incentive rates, and sectors covered. It was launched in the context of India's
increasing dominance in information technology, business process outsourcing,
software development, and various other service industries on the global stage.

Objectives

The primary objectives of SEIS are as follows:

1. Promoting Services Exports: SEIS aims to boost the export of services from
India by providing financial incentives to service providers.
2. Diversification of Service Exports: It encourages diversification of service
exports to new markets and sectors, reducing dependency on traditional
markets.
3. Enhancing India's Competitiveness: SEIS strives to make Indian service
providers more competitive in the global market by offsetting various input
costs.
4. Attracting Foreign Exchange: By incentivizing service exports, SEIS helps in
attracting foreign exchange, thereby strengthening India's foreign reserves.

Eligibility and Incentives

To be eligible for SEIS benefits, service providers must fulfill certain conditions,
including earning net foreign exchange or fulfilling specific performance criteria. The
scheme covers a wide range of service sectors, such as IT and IT-enabled services,
research and development services, legal services, healthcare, and more.
Under SEIS, eligible service providers receive transferable duty credit scrips, which
can be used to pay various customs duties, including basic customs duty and excise
duty. The quantum of incentives varies based on the sector and the extent of foreign
exchange earnings. The incentives typically range from 3% to 5% of the net foreign
exchange earned.

Impact on India's Service Exports

SEIS has had a significant impact on India's service export industry:

1. Increased Exports: The scheme has contributed to a substantial increase in

India's service exports, particularly in IT, BPO, software development, and
professional services.
2. Diversification: SEIS has encouraged service providers to explore new
markets and diversify their service offerings, reducing dependence on a few
sectors and geographies.
3. Competitiveness: By offsetting input costs, SEIS has made Indian service
providers more competitive globally, enabling them to offer services at
competitive prices.
4. Foreign Exchange Reserves: The scheme has helped in attracting foreign
exchange, which is vital for strengthening India's foreign exchange reserves.

Challenges and Future Directions

While SEIS has been successful in promoting service exports, it faces challenges such
as administrative complexities, compliance issues, and the need for periodic reviews
to keep it aligned with changing global trade dynamics. To ensure its continued
effectiveness, the scheme requires regular evaluation and adjustments to meet the
evolving needs of the service export industry.

Conclusion

The Service Export from India Scheme (SEIS) is a vital policy initiative aimed at
promoting and incentivizing service exports from India. It has significantly
contributed to the growth of India's service sector, enhancing its competitiveness on
the global stage. SEIS stands as a testament to India's commitment to harnessing the
potential of its service industry and expanding its footprint in the international
market. As India continues to evolve as a global service hub, SEIS remains a
cornerstone of its service export strategy.