INTERNATIONAL BUSINESS

MBA 531B

CIA 3 - VIDEO INTERVIEW WITH SERVICE EXPORTER

SUBMITTED BY

GROUP - 3

MANDA ARPITHA 1927435

NIKITA RATHOD 1927439
ANUSHA TYAGI 1927428
JAYDEEP BAIRAGI 1927207
SOUMYA SUDESHNA 1927448
SERVICE EXPORT:

The variety of services in international trade is quite broad. Here’s just a few headings or
categories: business support, information technology and computers, education and training,
tourism, financial and legal, healthcare, architecture, engineering, scientific and environmental,
transport services, and retail. These are just a few of the broad headings for what you would term
‘intangible’ offerings.

Intangible literally means you can’t feel, see, touch or hold it. An exported good is tangible,
whereas a service is primarily an experience. A service is something that you experience at a
certain time and it can’t be repeated, whether it’s a telephone call or working with a professional
like an accountant or lawyer. You would experience something at that time and its intangible –
that’s a service.
SERVICE EXPORTER:

Service Exporter is an exporter who exports the services where we can't see the product
physically, i.e., intangible products. We can explain service export simply as any service
provided by a person in one nation to people or companies from another. Service exports are an
important emerging trend in global trade.

ABOUT THE ORGANIZATION:

The Finovate Group is a research and events firm

focused on innovation in financial and banking
technology. The team runs the Finovate and
FinDEVr conference series and authors the
associated blogs. In 2007, the company was set
about to make the most memorable event in financial services technology. They rounded up 20
of the coolest companies including Mint (acquired by Intuit in 2009 for $170 million), Lending
Club (IPO in 2014, valued at more than $7 billion), and Prosper (still private, but valued at more
than $1 billion). And as they say, the rest is history.
The company launched its first conference series focused on financial & banking technology
innovation in 2007. Finovate debuted in New York, added a Bay Area event in 2008, and
expanded internationally to London in 2011, Asia in 2012 and Dubai and Cape Town in 2018. In
2014, a second conference series focusing on fintech developers launched on the West Coast.
FinDEVr added an East Coast event in 2016 and expanded internationally to London in 2017.

QUESTIONNAIRE:

1. A brief introduction about the Interviewee.

 2. According to the Export of Service rules, any taxable service shall be treated as export of
service “if such service is provided from India and used outside India. So, What type of
service your firm renders, and is under which service label?

3. Under the General Agreement on Trade in Services (GATS), four modes of delivery of
services were recognized: Cross Border, Consumption Abroad, Commercial presence,
Movement of Natural Persons. Therefore, would you like to explain what is the mode of
delivery and process of these services?

4. In general, we are familiar with some of the subsidiary schemes provided by the Govt. to the
service exporters, if you have opted in, would you like to discuss that in detail?

5. Commerce and Industry Minister, Piyush Goyal has proposed to discontinue export
incentives for services exports under SEIS, how will this impact your firm and other export
community?

6. Different countries follow different taxation systems, how did you find your best fit among
the countries to export your services?

7. What are the different countries in which the services are exported?

8. Where does your company obtain assistance exporting services outside India?

9. Can you provide the information in relation to your total turnover of the company with
respect to service under export?

10. Do you have any plans for expansion if yes, are you having any difficulty with its trade
policies and implications?

VIDEO INTERVIEW

INTRODUCTION
SEIS or Service Export from India Scheme is a reward-based initiative from the government,
which aims to elevate the export of certain notified services and eventually boost the economy.
Under the scheme, a service provider of the notified services, located in India, can claim
additional benefits (Duty Credit Scrip) for their transaction on an international market, while still
enjoying the perks as provided under GST regime.

As per Foreign Trade Policy of India 2015-2020, Service Providers of Notified Services in India,
shall be rewarded under SEIS, as per the notified terms and conditions.

Notified Services under Service Exports from India Scheme (SEIS)

The various services eligible to claim benefits under the SEIS, as enlisted in Appendix 3D of the
Foreign Trade Policy, 2015-20, are as follows:

1. Business Services

➢ Professional services

Legal Services, Accounting, auditing and bookkeeping services, Taxation services, Architectural
services, Engineering services, Integrated engineering services, Urban planning and landscape
architectural services, Medical and dental services, Veterinary services, Services provided by
midwives, nurses, physiotherapists and paramedical personnel.

➢ Research and development services

R&D services on natural sciences, R&D services on social sciences and humanities,
Interdisciplinary R&D services.

➢ Rental/Leasing services without operators

Relating to ships, aircraft, other transport equipment, and other machinery and equipment

➢ Other business services eligible

Advertising services, Market research and public opinion polling services Management
consulting service, Services related to management consulting, Technical testing and analysis
services, Services incidental to agricultural, hunting and forestry, Services incidental to fishing,
Services incidental to mining, Services incidental to manufacturing, Services incidental to energy
distribution, Placement and supply services of personnel, Investigation and security, Related
scientific and technical consulting services, Maintenance and repair of equipment (excluding
maritime vessels, aircraft or other transport equipment), Building-cleaning services,
Photographic services, Packaging services, Printing, publishing and Convention services.

2. Communication Services

Audio-visual services: Motion picture and videotape production and distribution service, Motion
picture projection service, Radio and television services, radio and television transmission
services, Sound recording

3. Construction and related engineering services

General Construction work for the building, General Construction work for Civil Engineering,
Installation and assembly work, building completion and finishing work

4. Educational Services (SEIS benefits not available to Capitation fee)

Primary education services, Secondary education services, Higher education services, Adult
education.

5. Environmental Services
Sewage services, Refuse disposal services, Sanitation and similar services

6. Health-related and Social Services.

Hospitality services

7. Tourism and Travel-related Services.

➢ Hotels and Restaurants (including catering)
➢ Travel agencies and tour operator’s services
➢ Tourist guides services
8. Recreational, cultural and sporting services (other than audio-visual services)

Entertainment services (including theatre, live bands and circus services), News agency services,
Libraries, archives, museums and other cultural services, Sporting and other recreational
services.

9. Transport services

(Operations from India by Indian Flag Carriers only is allowed under Maritime transport
services)

● Maritime Transport Services

Passenger transportation (Operations from India by Indian Flag Carriers only is allowed under
Maritime transport services), Freight Transportation (Operations from India by Indian Flag
Carriers only is allowed under Maritime transport services), Rental of vessels with crew
(Operations from India by Indian Flag Carriers only is allowed under Maritime transport
services), Maintenance and repair of vessels, Pushing and towing services, Supporting services
for maritime transport.

● Air transport services

Rental of aircraft with crew, maintenance and repair of aircraft, Airport Operations and ground
handling.

● Road Transport Services

Passenger transportation, Freight transportation, Rental of Commercial vehicles with operator,

Maintenance and repair of road transport equipment, supporting services for road transport
services.

● Services Auxiliary to All Modes of Transport

Cargo-handling services, Storage and warehouse services, Freight transport agency services.

What is the Eligibility Criteria?

Prerequisites:

In order to claim the benefits of SEIS,

● The service provider should have minimum net free foreign exchange earnings of
US$15,000 in the year of rendering the services.
● For Individual Service Providers and a sole proprietorship, such minimum net free
foreign exchange earnings criteria would be US$10,000 in the financial year when the
services have been rendered.
● The service provider shall have to have an active Import Export Code (IE Code) at the
time of rendering such services for which rewards are claimed.

Eligibility of Services

The following modes of Services are eligible under the SEIS scheme:
 ● Services rendered in Mode I: Cross Border Trade i.e., Supply of a service from India to
any other country
● Services rendered in Mode II: Consumption abroad i.e., Supply of a service from India to
service consumers of any other country.

Conversely, the following mode of Supply of a Service are ineligible under the scheme

● Services rendered in Mode 3: Commercial Presence i.e. Supply of service from India
through Commercial Presence in any other Country.
● Services rendered in Mode 4: Presence of Natural persons in any other country.

P.S: In case the IEC holder is a manufacturer of goods as well as service provider, then the
foreign exchange earnings and Total Expenses/ payment/ remittances to be taken into account for
the service provider only.

Eligibility of Foreign Exchange

The following exchange remittances would not be considered as a part of the Net Foreign
exchange earned for the purpose of claiming incentives under this scheme:-

● The Foreign exchange remittances, other than those earned for rendering of notified
services.
● Other sources of foreign exchange such as equity or debt participation, donations,
receipts or repayment of loans, etc. and any other inflow of foreign exchange, unrelated
to rendering of service.

What is the main purpose of the GATS?

One of the highlights of the Uruguay Round, which took effect in January 1995, was the creation
of the GATS. The GATS has been focused on exactly the same goals as its predecessors in the
commodity trade: the General Agreement on Tariffs and Trade (GATT): establishing a credible
and effective system of international rules for trade; ensuring equal and fair handling of all
parties (non-discrimination principle).

What services are covered?

The GATS apply in principle to all service sectors, with two exceptions.

Article I (3) of the GATS excludes “services supplied in the exercise of governmental authority”.
These are services that are supplied neither on a commercial basis nor in competition with other
suppliers. Cases in point are social security schemes and any other public service, such as health
or education, that is provided at non-market conditions.

Furthermore, the Annex on Air Transport Services exempts from coverage measures affecting air
traffic rights and services directly related to the exercise of such rights.

Under the General Agreement on Trade in Services (GATS), four modes of delivery of services
were recognized that are:

1.Cross Border- The service itself crosses the border

2. Consumption Abroad- The consumer travels across the border
3.Commercial presence- the establishment of an office or industry
4. Movement of Natural Persons- The service supplier travels across the border.

What are the basic obligations under the GATS?

Obligations contained in the GATS may be categorized into two broad groups: general
obligations that apply to all members and services sectors, as well as obligations that apply only
to the sectors inscribed in a member's schedule of commitments.

(a) General obligations

MFN treatment: Under Article II of the GATS, members are held to extend immediately and
unconditionally to services or services suppliers of all other members “treatment no less
favourable than that accorded to like services and services suppliers of any other country”. This
amounts to a prohibition, in principle, of preferential arrangements among groups of members in
individual sectors or of reciprocity provisions which confine access benefits to trading partners
granting similar treatment.
Transparency: GATS members are required, among other things, to publish all measures of
general application and establish national enquiry points mandated to respond to other members'
information requests.

(b) Specific commitments

Market access: Market access is a negotiated commitment in specified sectors. It may be made
subject to various types of limitations that are enumerated in Article XVI(2). For example,
limitations may be imposed on the number of services suppliers, service operations or employees
in the sector; the value of transactions; the legal form of the service supplier; or the participation
of foreign capital.

National treatment: A commitment to national treatment implies that the member concerned
does not operate discriminatory measures benefiting domestic services or service suppliers. The
key requirement is not to modify, in law or in fact, the conditions of competition in favour of the
member's own service industry. Again, the extension of national treatment in any particular
sector may be made subject to conditions and qualifications.

Analysis of Service export in COVID-19:

● India's services trade surplus improved 8.9% to US$ 41.99 billion in April-October
2020 over a year ago, The services exports declined 8.3% to US$ 100.97 billion.
● India's services imports dipped 17.6% to US$ 58.98 billion in April-October 2020.
● As per the data released by the Reserve Bank of India, India's services exports
declined 1.4% to US$ 17.29 billion in October 2020 over October 2019.
● India's services trade surplus improved 11.0% to US$ 7.15 billion in October 2020
from US$ 6.44 billion in October 2019.
CONCLUSION

The Ministry of Commerce (GoI) states that India has already signed detailed bilateral
agreements with the Governments of Singapore, South Korea, Japan and Malaysia on the
services front. The Department also emphasizes the ongoing monitoring by the respective
subgroups of concerns connected with the implementation or review of these bilateral
agreements. The related issues are addressed on an ongoing basis in the Joint Committees of
Trade Partners. In addition, the Department is also engaged in bilateral FTA agreements,
including trade in services with Canada, Israel, Thailand, the European Free Trade Association
(EFTA), Australia and New Zealand. The Ministry is also keen to participate in bilateral trade
dialogues with the US (India-US Trade Policy Forum), Australia (India-Australia Joint
Ministerial Commission), China (India-China Working Group on Services) and Brazil (India-
Brazil Trade Monitoring Mechanism). The recently signed FTA in services and investment with
ASEAN and ongoing plurilateral negotiations under RCEP are evidence of India’s changing
stance and of the fact that the country is now looking at leveraging FTAs to further enhance its
service-trade prospects.

While India has made services its stronghold, exporting services still remains a big challenge. On
the regulatory front, entry barriers have been created by various governments. For example,
regulation in China limits the growth of technology companies as large as Facebook, Google and
Twitter. It can be argued that China’s defense of Baidu restricts alternatives, and has a
compounding effect on competition. In the services sectors, licensing procedures, territorial
restrictions, safety standards and other legal requirements are deterring, and delaying the
expansion of trade. China has political reasons to create regulatory exceptions. But it is not
alone. A case in point could be the European Union.

Export services from India cannot remain an unfinished agenda forever. And as long as our
international exchange policy does not devote a few chapters to it, it is bound to remain so. And
the day that's going on... Ok, that's going to be good at starting to make India a real service
export super-power!