Foreign Trade Policy 2023: what actually matters for service exporters and SMEs?

What is the Foreign Trade Policy 2023?

The Foreign Trade Policy (FTP) is notified by the Central Government under section 5 of the Foreign Trade (Development & Regulation) Act, 1992. The 2023 Policy covers the export and import of goods and services. Under paragraph 1.01 of chapter 1 it came into force on 1 April 2023 and "shall continue to be in operation unless otherwise specified or amended". That is the biggest structural change from earlier five-year policies: there is no expiry date, and the government amends the Policy by notification when it needs to (para 1.02). Procedures sit in a separate Handbook of Procedures, which DGFT changes by public notice (para 1.03).

Because it is amended in place, the Policy you read today is the amended version. DGFT publishes the current chapters on its Foreign Trade Policy page; as of October 2026, most chapters are posted as revised version 1.2.2, and chapter 4 (duty exemption schemes) carries a 2026 revision. Always work from the posted text rather than an April 2023 summary.

Does a service exporter need an IEC under the FTP?

Only to claim benefits. Paragraph 2.05 of chapter 2 makes the Importer-Exporter Code mandatory for goods unless exempted, but for export of services or technology the IEC is necessary "on the date of rendering services for availing benefits under the Foreign Trade Policy". A freelancer or agency that claims nothing under the Policy can export without one. If you plan to claim something, get the IEC first, because it must exist on the service date. The detail, including the annual April–June update, is in IEC and Udyam for service exporters.

Why does the RCMC matter?

Paragraph 2.57 requires a Registration-cum-Membership Certificate (RCMC) from anyone applying for an authorisation or for any other benefit or concession under the Policy, unless specifically exempted. RCMCs are issued by Export Promotion Councils acting as registering authorities (para 2.56), each council covering a group of products, projects or services. In practice, IEC and RCMC together are the entry ticket for any Policy benefit, including status recognition.

Can services count towards Export House status?

Yes. Paragraph 1.25 says all exporters of goods, services and technology with an IEC are eligible for recognition as a status holder based on export performance, counted as the FOB value of export earnings in freely convertible currency or in rupees where permitted. Performance is needed in each of the three preceding financial years as well as the current one.

For SMEs the useful clause is paragraph 1.27: exports by micro and small enterprises, as defined under the MSMED Act, get double weightage when calculating eligibility, but only for One Star status. A service rendered can get double weightage only once. Privileges in paragraph 1.29 include authorisations and customs clearances on self-declaration, exemption from bank guarantees under Policy schemes, and exemption from compulsory negotiation of documents through banks (remittances must still come through banking channels). Two Star and above holders take on a mentoring role, training a set number of people in international trade each year (para 1.30).

Where do districts, e-commerce and rupee trade come in?

Districts as Export Hubs. Chapter 3 asks each district to identify products and services with export potential. A District Export Promotion Committee, chaired by the Collector, District Magistrate or Deputy Commissioner and co-chaired by a DGFT regional authority, prepares a District Export Action Plan that may prioritise two or three of them. A services firm in a district that has listed its sector has a direct channel for its bottlenecks.

E-commerce exports. Chapter 9 defines e-commerce exports of services as services sold through the internet on an e-commerce platform, paid for by international credit or debit cards or other authorised electronic payment channels as RBI specifies. The chapter is mostly about goods: courier exports now carry no value limit per consignment (para 9.05), and it provides for e-commerce export hubs. For digital-product companies, the definitions matter more than the hub rules; see how Indian SaaS companies collect from global customers.

Rupee trade. Paragraph 2.52 lets exports of goods and services be invoiced and paid in rupees through Special Rupee Vostro Accounts of correspondent banks of partner countries, and paragraph 2.53 lets such rupee proceeds count for Policy benefits. RBI’s rules give rupee-invoiced exports twelve months to realise instead of nine; see invoice currency for export clients and rupee internationalisation and SRVAs.

What else in the Policy touches service exporters?

• Non-realisation (para 2.54). If export proceeds are not realised within the time RBI sets, any benefits claimed on them must be returned. Write-offs for reasons beyond your control follow RBI’s process.
• Export credit insurance (para 2.55). ECGC covers losses from a buyer’s insolvency or default and from political risks, and can help you take on new markets.
• Electronic export records (para 1.17). DGFT receives realisation data from banks through e-BRC, and RBI’s EDPMS monitors exports of goods and software; see e-BRC and FIRA.
• Software Technology Parks (chapter 6). Units under the STP scheme follow their own chapter, alongside EOUs and EHTPs.
• MSME grievances (para 1.31). An inter-ministerial committee is provided for MSME trade grievances that have policy implications.

The FTP itself now offers few direct cash incentives for services. Most financial support for small exporters runs through the Export Promotion Mission, which is implemented by DGFT but sits outside the Policy text; its interventions and limits are in government support for MSME exporters.