How to start a service export business in India

Why service exports from India are growing fast

India's services exports reached an estimated $387.5 billion in FY 2024-25, according to RBI data. That is a 13.6 per cent increase over the previous year and ranks among the fastest-growing of India's top export categories. Global companies actively hire Indian service providers for work in technology, consulting, design, education, finance, and dozens of other sectors. The cost advantage is real, but so is the quality reputation India has built over decades.

If you deliver a service and at least some of your clients are outside India, you are already a service exporter in the eyes of Indian law. This guide walks you through what that means in practice, which registrations you need, how to stay compliant, and how to get paid efficiently.

Step 1: Understand what counts as a service export

A service export means delivering a service to a client outside India and receiving payment in foreign currency. Under India's Foreign Trade Policy, services are categorised across four modes of delivery. Still, for most small and medium businesses, the relevant mode is cross-border supply: you sit in India and deliver the work remotely to a foreign client.

The range of qualifying services is broad. It includes software development, IT consulting, digital marketing, design, architecture, legal services, accounting, tutoring, content creation, research, and financial advisory, among many others. The key criterion is that the end client is a non-resident entity paying you in foreign currency.

Unlike goods exports, you do not need a shipping bill, a bill of lading, or customs clearance. The entire transaction is digital or document-based. This makes service exports significantly easier to start but equally subject to FEMA compliance requirements once payment arrives.

Step 2: Register your business

You need a formal business identity before you can open a business bank account, raise invoices in foreign currency, or register with any government body. The most common structures for service exporters are sole proprietorships, LLPs, and private limited companies.

A sole proprietorship is the simplest starting point, particularly for individual service providers. Your personal PAN doubles as the business PAN, and setup takes days. However, many enterprise clients abroad expect to deal with a registered company. An LLP or private limited company carries more institutional weight and makes onboarding with large foreign clients easier.

Whichever structure you choose, ensure you have a valid PAN, Aadhaar, GST registration (if your turnover crosses the applicable threshold), and a registered address. These are prerequisites for every subsequent step. Even if your turnover is below the GST threshold, voluntary GST registration is often worth considering because it allows you to file a Letter of Undertaking and export services at zero-rated GST.

Step 3: Understand whether you need an IEC code

Here is where service exports differ from goods exports. The DGFT's own portal states clearly: for service exporters, the IEC is not mandatory unless the service provider is claiming benefits under the Foreign Trade Policy. Your PAN effectively serves as your identifier for service export transactions.

That said, getting an IEC is still a practical choice for most service businesses. Banks increasingly ask for it when processing large or recurring foreign remittances. International platforms and enterprise clients sometimes list it as a compliance requirement during onboarding. And if you ever want to register with SEPC, the Services Export Promotion Council, or claim DGFT-linked incentives, the IEC is a prerequisite.

The application is online at dgft.gov.in, the government fee is ₹500, and issuance typically takes one to three working days. If you are at the stage of actively billing foreign clients, it makes sense to get the IEC now rather than scramble for it later when a bank or client asks. An annual update on the DGFT portal between April 1 and June 30 is required to keep it active.

Step 4: File your Letter of Undertaking (LUT)

This is one step that goods exporters do not need to take, but service exporters must not skip. A Letter of Undertaking, or LUT, is a declaration filed on the GST portal that allows you to export services without charging GST on your invoice. Without it, you would either need to charge 18 per cent GST on every export invoice (then claim a refund) or pay integrated GST upfront and recover it later. Both routes create cash flow problems and unnecessary paperwork.

Filing the LUT takes about 15 minutes on the GST portal under the refunds section. It is valid for one financial year and must be renewed every April before you raise your first export invoice for the year. There is no fee to file—your LUT reference number appears on every foreign-currency invoice you raise, confirming that the supply is zero-rated for GST.

Keep a record of your LUT filing acknowledgement. Some AD banks ask to see it when you submit documents to settle foreign remittances.

Step 5: Open a current account for export transactions

All foreign currency receipts must flow through an Authorised Dealer (AD) bank. You need a business current account at a bank authorised by the RBI to deal in foreign exchange. Most major scheduled banks in India qualify. Inform the bank at the time of opening that you are a service exporter, so they set up the account correctly for FEMA compliance and foreign remittance processing.

When payment arrives from a foreign client, your bank will ask for supporting documents: a copy of the invoice, the contract or statement of work, and the correct RBI purpose code for the transaction. The purpose code is a short alphanumeric code that indicates the type of service exported. Getting this right matters. An incorrect purpose code can delay settlement, trigger compliance queries, and affect your ability to close the transaction in the EDPMS system.

Common purpose codes include P0802 for software and IT services, P0803 for business and management consulting, P0805 for engineering services, P0811 for advertising and marketing services, and P1001 for audio-visual and related services. If you are unsure which code applies, ask your bank or chartered accountant before the first remittance arrives.

Choosing the right purpose code is one of the most common compliance gaps for first-time service exporters, and getting it wrong can result in delayed settlements and FEMA flags. A complete guide to RBI purpose codes for service exporters breaks down which code applies to which service category and how to avoid the most frequent errors.

Step 6: Understand your FEMA obligations

FEMA, the Foreign Exchange Management Act, applies to every foreign currency transaction you make or receive. As a service exporter, your main obligations are: raise invoices in foreign currency, ensure payment arrives within the permitted repatriation period, quote the correct purpose code, and keep your documentation in order.

Under the latest FEMA regulations notified by the RBI, the general time limit to realise and repatriate export proceeds has been extended from 9 months to 15 months. For service exports, this means you generally have 15 months from the date of export to bring payment home to India.

For service exporters, the export declaration is handled differently from goods. If you are registered with STPI or operate from an SEZ and export software services, you must file a SOFTEX form on the EDPMS portal. The RBI has proposed moving to a unified Export Declaration Form (EDF) for both goods and services, to be filed directly with your AD bank, with implementation expected from late 2026. For most other service exporters operating outside STPI or SEZ, a clean invoice and the correct purpose code on the bank's remittance documentation are the primary compliance tools.

After each payment is received, your bank issues a Foreign Inward Remittance Advice (FIRA) or e-FIRA. This document is your proof of export proceeds and is required for income tax filings, GST zero-rating documentation, and any future audit by the RBI or ED. Download and store it immediately after each receipt.

Step 7: Structure your service agreements and invoices correctly

A signed contract or statement of work is not just good business practice. It is a compliance document. When your bank processes a foreign remittance, they want to see that the payment corresponds to a genuine service rendered under a formal agreement. Without a contract, payments can be treated as miscellaneous receipts, attracting unnecessary scrutiny.

Your service agreement should clearly state the scope of work, the agreed fee, the currency of payment, the payment schedule, and the governing law. Your invoice should include your business name and address, the client's name and address, the invoice date, the service description, the amount in foreign currency, your LUT reference number, the bank account details for payment, and the statement "Export of Services — Zero Rated Supply under LUT."

Clear invoicing also protects you in disputes. If a foreign client raises a chargeback or questions a payment, a detailed invoice that matches the contract terms is your primary defence. Many service exporters lose disputes simply because their documentation was too casual.

Step 8: Receive international payments efficiently

Once you have delivered the service and sent the invoice, the question becomes how the money gets to you. Traditional SWIFT bank transfers work, but they are slow and expensive. Payments take one to five business days, pass through multiple correspondent banks, and each hop can deduct a charge. The FX markup your bank applies when converting incoming foreign currency to INR is typically two to four percentage points above the mid-market rate. On a $5,000 invoice, that quietly costs you ₹8,000 to ₹16,000.

A Global Collections Account (GCA) solves both problems. Winvesta's GCA gives you dedicated local account numbers in the US, UK, Europe, and other major markets. Your foreign client pays into a local account in their country, exactly as if they were paying a domestic supplier. No SWIFT. No correspondent bank fees. The money arrives in India, typically within one business day, with no FX markup and low, transparent fees.

Every inward payment through Winvesta's GCA comes with an e-FIRA. You do not need to chase your AD bank for the document. It is available on your Winvesta dashboard after settlement, ready for your tax filings and FEMA records. For service exporters who receive multiple payments a month from different clients in different currencies, this alone removes hours of documentation work.

Most service exporters do not realise how much they lose in conversion and transfer costs before money actually reaches their account. Hidden international payment charges break down exactly where those costs come from and how to avoid them. Ready to collect more of every payment you earn? Open your Winvesta GCA and start receiving in USD, GBP, EUR, and more — with e-FIRAs on every receipt.

Step 9: Register with SEPC

The Services Export Promotion Council (SEPC) is the equivalent of an Export Promotion Council for the services sector, set up by the Ministry of Commerce and Industry. Registering with SEPC gives you an RCMC valid for 5 years. This is the gateway to claiming government export incentive schemes under the Foreign Trade Policy, participating in international trade fairs at subsidised cost, accessing verified trade leads, and getting visa facilitation letters for business travel abroad.

SEPC membership is not mandatory to export services, but it becomes relevant as soon as you want to claim any government benefit or grow beyond individual client relationships. The application is submitted through the DGFT's e-RCMC portal. It requires your IEC, a CA-certified statement of foreign exchange earnings for the last three financial years, and the applicable membership fee based on your annual turnover.

SEPC covers a wide range of service sectors, including IT, consulting, education, healthcare, media, architecture, legal services, and financial services. If your service falls outside these categories, FIEO, the Federation of Indian Export Organisations, offers a broader membership that covers mixed or unlisted service types.

Key documents every service exporter needs

Keep these documents organised before you raise your first foreign currency invoice. Missing any one of them can slow down bank settlements and create FEMA reconciliation gaps.

• PAN card of the business
• GST registration certificate (if applicable)
• LUT filing acknowledgement (renewed every April)
• IEC certificate from DGFT (recommended even if not mandatory)
• SEPC RCMC (once registered)
• Signed service agreement or statement of work for each client
• Foreign currency invoices with LUT reference number
• e-FIRA for each inward remittance
• Bank account details shared with clients for payment