India Boosts IT and E-commerce Exports with New Incentives

India’s Department of Commerce has reported that incentives and enabling frameworks for information technology (IT), business services and online sellers have been strengthened to help domestic enterprises tap global markets. The measures are part of the Government of India’s broader 2025 year-end review of trade policy implementation and export promotion efforts, which underline a shift towards services exports, digital trade, and e-commerce–driven participation in global value chains.[1]

Context: Services and Digital Trade at the Core of Export Strategy

The Department of Commerce review situates these new and reinforced measures within India’s overall trade policy framework, including the Foreign Trade Policy (FTP) 2023, sectoral production-linked incentive schemes, and dedicated programmes for services exporters. The review notes that services exports, led by IT and IT-enabled services (ITES), consulting, global capability centres, fintech, health-tech and other business services, have emerged as a key driver of India’s external sector performance.[1]

In this backdrop, the government has focused on creating regulatory clarity, building digital infrastructure, simplifying export procedures, and aligning incentives so that both large firms and smaller online sellers can participate more easily in cross-border commerce. The emphasis is on creating an enabling ecosystem rather than relying solely on direct subsidies, with policy instruments designed to reduce transaction costs, expand market access and build capacity.

Strengthening Incentives for IT and Business Services

The review highlights that India’s IT and business services sector remains central to services export growth, with policy support moving towards innovation, market diversification and higher value-added work. Several strands of this support are anchored in coordination between the Department of Commerce and other economic ministries, particularly those dealing with digital economy, technology and innovation.[1]

According to the year-end review, the government has sought to integrate services export promotion with broader industrial and innovation policy. This includes facilitating industry–academia linkages, encouraging digital skill development and strengthening support mechanisms for firms seeking to move up the value chain in areas such as cloud services, artificial intelligence solutions, data analytics, cyber security, health-tech, and other knowledge-intensive services.[1]

The Department of Commerce has also focused on removing procedural bottlenecks that can affect services exporters. This spans documentation norms, recognition of service categories, and access to export promotion schemes, as well as improved data capture for services trade, so that policy can be more closely tailored to sector needs.

Support Ecosystems and Innovation Linkages

The review cites several innovation-support initiatives in allied sectors as part of a wider ecosystem that indirectly benefits IT and business services exporters. For example, the Biotechnology Industry Research Assistance Council (BIRAC), under the Department of Biotechnology, operates as an interface agency supporting startups and small and medium enterprises through schemes such as the Biotechnology Ignition Grant (BIG) and Social Innovation Programme for Products: Affordable and Relevant to Societal Health (SPARSH). These programmes strengthen the research and innovation base in pharma, biopharma and health-tech, creating new avenues for IT and analytics services, digital platforms and regulatory-tech offerings in global markets.[1]

By enabling a steady pipeline of innovation-led enterprises in sectors like life sciences and healthcare, these schemes support the growth of specialised IT and business services that can be exported, including clinical data management, health informatics, telemedicine platforms and digital regulatory solutions. The review positions these linkages as part of a broader services-oriented export strategy, where cross-sectoral innovation feeds into demand for advanced digital and professional services.[1]

Enabling Frameworks for Online Sellers and E-commerce Exporters

A key strand of the Department of Commerce review is the acknowledgement that online sellers, particularly micro, small and medium enterprises (MSMEs), have become important participants in cross-border trade through e-commerce channels. The government has therefore moved to strengthen enabling frameworks in logistics, customs procedures, and digital trade facilitation, with the aim of making small-value, high-volume exports more efficient.[1]

The review highlights policy efforts to address constraints faced by online exporters, such as complex documentation, limited awareness of export norms, and difficulties in accessing reliable international logistics and payment systems. The Department of Commerce has been working on standardising procedures and promoting digital systems that allow online sellers to comply with export requirements with lower friction.

Implementation has involved coordination with customs authorities, postal and courier operators, and digital platforms to facilitate smoother cross-border e-commerce flows. The emphasis is on simplifying declarations, streamlining return shipments, and enabling better tracking and reporting of e-commerce exports, so that they are adequately captured in official statistics and can benefit from relevant export-promotion schemes.[1]

Digital Skills and Capacity-Building for Online Sellers

The enabling framework also includes capacity-building measures to help prospective exporters understand global market requirements. The review notes that government-supported digital skill programmes have helped more than 15.78 lakh candidates build capabilities in emerging technology and digital services, making it easier for individuals and enterprises to engage in global digital markets.[2]

While these programmes are not limited to exporters, they contribute to a better-prepared workforce for IT, business services and digital commerce. This, in turn, supports small firms and online sellers in adopting appropriate digital tools, managing cross-border transactions, and complying with technical and regulatory requirements in overseas markets.

Alignment with Production-Linked and Sectoral Incentive Schemes

The Department of Commerce review is issued in a context where several export-facing sectors already benefit from production-linked incentive (PLI) schemes. As of June 2025, actual investments of over ₹1.88 lakh crore have been realised across 14 PLI sectors, resulting in incremental production and sales. While PLI schemes primarily target manufacturing, they foster ecosystem development that also generates demand for IT, business services, logistics management and digital trading platforms, indirectly supporting services exports.[2]

In pharmaceuticals, for instance, the PLI scheme with a total budgetary outlay of ₹15,000 crore aims to strengthen domestic manufacturing of high-value products, including biopharmaceuticals, where incentives at 10 percent on incremental sales are available.[1] As these sectors expand capacity and integrate into global supply chains, the associated demand for regulatory services, IT platforms, data analytics, supply-chain optimisation tools and other business services creates opportunities for Indian firms to provide high-value services to global clients.

The Department of Commerce review positions these linkages as part of an integrated approach, wherein manufacturing upgrades and services export promotion reinforce each other, particularly in segments such as health-tech, med-tech, digital quality compliance and global value-chain management.

Administrative Mechanisms and Policy Instruments

The Department of Commerce has relied on several administrative and policy instruments to strengthen incentives and enabling frameworks for IT, business services and online sellers. These instruments range from export promotion councils and sector-specific working groups, to digital portals and consultation mechanisms with industry stakeholders.[1]

Key elements of this administrative approach include:

• Reinforcement of schemes under the Foreign Trade Policy for services exporters, including mechanisms that reward foreign exchange earnings and encourage diversification into new markets.
• Use of trade promotion activities, such as participation in global trade fairs, virtual exhibitions and sectoral roadshows, to showcase India’s IT and business services capabilities.
• Promotion of cross-border e-commerce as a distinct export channel, with dedicated attention to logistics, customs and compliance challenges faced by small online exporters.
• Coordination with other ministries for digital infrastructure development, cybersecurity norms and data governance frameworks that affect global service delivery.

According to the review, these measures are overseen through periodic monitoring of schemes and data-driven assessment of export performance, enabling the Department of Commerce to identify emerging bottlenecks and adjust incentives or procedures where necessary.[1]

Data, Monitoring and Feedback Loops

Improved data collection is a critical element of the enabling framework. The review underlines efforts to capture granular information on services exports and e-commerce transactions, which allows policymakers to track growth areas more accurately, assess compliance costs, and identify regulatory gaps.[1]

Feedback loops with industry associations, startup networks, online marketplaces and export promotion councils are used to gather operational insights. These insights help in refining procedures for documentation, customs clearances, payments and dispute resolution, particularly in the context of small-value digital and physical shipments.

Public Statements Emphasising Digital and Services-Led Growth

In public communication around the year-end review, officials have repeatedly emphasised the importance of services and digital trade in India’s export trajectory. While the review document itself is primarily factual, it reflects a consistent policy direction that prioritises IT, business services and online commerce as engines of export growth alongside traditional goods.

The Department of Commerce has strengthened incentives and enabling frameworks for IT, business services and online sellers to tap global markets, with a view to aligning India’s export promotion architecture with emerging patterns of global trade and digitalisation.[1]

This emphasis is evident in the integration of digital initiatives, innovation support, and export facilitation under a coherent policy narrative that seeks to expand India’s role in global value chains not only as a supplier of goods but also as a provider of advanced services.

Potential Impact on Businesses and Exporters

For IT and business services firms, especially small and medium enterprises, the strengthened frameworks can translate into lower administrative costs, better access to export support schemes, and improved visibility in overseas markets. Streamlined procedures, clearer categorisation of services and dedicated export promotion activities can help firms diversify client bases and venture into new geographies.

Companies engaged in software-as-a-service, business process management, consulting, design, cloud-based solutions and cyber security may find it easier to leverage government programmes for market entry, standards compliance and participation in global tenders or partnerships. As allied sectors like pharmaceuticals, health-tech and advanced manufacturing expand under their respective incentive schemes, the demand for high-end IT and business services exports is also expected to grow.

For online sellers, particularly MSMEs and individual entrepreneurs, the focus on e-commerce export facilitation can lower entry barriers to international markets. Simplified documentation, digital customs procedures, and improved logistics coordination can make it easier to manage small consignments, returns and payments.

Participation in cross-border e-commerce can allow artisans, small manufacturers and niche brand owners to reach overseas customers without the scale traditionally required for export operations. This can diversify India’s export basket and distribute export opportunities more widely across regions and firm sizes.

Implications for Administration and Governance

Administratively, the strengthening of incentives and enabling frameworks implies closer coordination between trade, technology, finance and sectoral regulators. For instance, customs authorities, the Directorate General of Foreign Trade (DGFT), technology ministries and financial regulators must jointly ensure that systems for documentation, foreign exchange realisation, and compliance are aligned to the needs of digital and services exporters.

The review points to increased use of digital platforms for regulatory interactions, mirroring a broader move towards paperless governance. In other domains, such as the cooperative sector, the government has deployed enterprise resource planning systems and common software platforms to improve transparency, accuracy and real-time record keeping.[3] A similar reliance on technology-enabled processes is evident in trade facilitation and export promotion, where online portals and digital documentation aim to reduce turnaround times and enhance predictability for businesses.

For administrators, this shift requires investment in capacity-building, change management and IT systems, as well as updated standard operating procedures that factor in the specific characteristics of services trade and e-commerce. Agencies must also ensure that data protection, cybersecurity and consumer-protection standards are respected, particularly when Indian firms handle cross-border data or provide digitally delivered services.

Longer-Term Economic and Policy Significance

Over the medium term, the strengthened frameworks for IT, business services and online sellers are expected to support India’s objective of achieving higher and more diversified export growth. Services exports already contribute significantly to India’s foreign exchange earnings, and further integration of digital trade into export policy can help cushion the economy against fluctuations in specific goods markets.

The year-end review indicates that the government sees digital and services-led exports as complementary to manufacturing growth. Investments attracted through PLI schemes and other industrial policies are intended to create sophisticated supply chains in which Indian firms can supply both goods and associated services, such as design, engineering, operations support, compliance and digital product delivery.[2]

As global trade evolves towards greater reliance on knowledge-intensive activities, data flows and digital platforms, the policy stance described in the Department of Commerce review suggests a deliberate alignment of India’s export facilitation structures with these trends. The focus on enabling rather than purely compensatory incentives indicates an effort to build durable capabilities that can sustain competitiveness in international markets.

Outlook

The Department of Commerce review underscores that the strengthening of incentives and enabling frameworks for IT, business services and online sellers is an ongoing process, guided by data, stakeholder feedback and global trade developments.[1]

Further refinements in customs procedures for e-commerce exports, service classification, market access negotiations and mutual recognition arrangements can be expected as India’s participation in global digital trade deepens. Continued coordination across ministries and regulators will be important to maintain coherence between domestic digital policies and external trade commitments.

For businesses and citizens, the core impact lies in a more supportive environment for exporting services and products through digital means. Whether through traditional IT services contracts, specialised business solutions or cross-border e-commerce platforms, Indian enterprises now operate within a policy framework that increasingly recognises and facilitates their role in the global marketplace.