Indian Government Considers Streamlining IT Export Processes Amid Global Trade Challenges
The Ministry of Electronics and Information Technology (MeitY) is currently evaluating a significant proposal from the information technology sector aimed at transforming the Goods and Services Tax (GST) portal into a comprehensive digital platform for all IT export reporting and certifications. This initiative comes at a critical juncture, as the industry grapples with potential tariff extensions on software imports by the United States, a move that could have far-reaching implications for Indian IT firms.
Addressing Industry Concerns
Officials from MeitY have indicated that the ministry is set to discuss the demands put forth by the National Association of Software and Service Companies (Nasscom) at an inter-ministerial meeting. Key among these demands is the request to abolish the Reserve Bank of India’s (RBI) proposed new Export Declaration Form (EDF) for software exports. Nasscom is advocating for extended submission timelines and the removal of invoice value limits, which they argue could hinder the efficiency of the export process.
A government official stated, “The government has always worked for ease of doing business in the sector. We are studying these demands, and other government stakeholders will be informed of the issues being faced by firms.” This statement underscores the government’s commitment to fostering a conducive environment for IT exports, which have become a cornerstone of India’s economy.
Current Export Reporting Framework
Under the existing framework, software exports are reported using the Software Export Declaration form (SOFTEX), which is managed by the Software Technology Parks of India (STPI). This form is specifically designed to accommodate the unique nature of software exports, including aspects like digital delivery and recurring billing, which do not involve the physical movement of goods.
Nasscom believes that with some enhancements, the SOFTEX framework could be seamlessly integrated into the GST system. This integration would not only streamline the reporting process but also eliminate the need for duplicate filings and reconciliations. In a submission to the government in August, Nasscom emphasized that such a move would ensure consistent, real-time export data, thereby saving time and reducing compliance costs.
Concerns Over the Proposed EDF
Nasscom has expressed strong opposition to the introduction of the EDF, arguing that it could complicate the export process and lead to increased costs and delays. The organization highlighted that many software exporters already navigate a complex landscape of overlapping systems, including GST, STPI, and the Export Data Processing and Monitoring System (EDPMS).
The proposed EDF imposes a limit on consolidated invoice filings to ₹1 lakh, which Nasscom has labeled as “impractical.” The industry body contends that any limitations should be based on the number of forms submitted rather than the invoice amounts, which could disproportionately affect larger transactions.
Additional Recommendations
In addition to opposing the EDF, Nasscom has called for an extension of the current 21-day deadline for software exporters to submit documentation for services to 30 days from the end of the invoice month. The organization argues that the existing timeline is too restrictive, particularly for large enterprises managing extensive global invoices.
Furthermore, many large software projects necessitate full advance payments that can exceed ₹25 crore. Nasscom has urged the government to adopt a more flexible approach regarding this cap, citing the diverse scale and nature of Indian tech exporters.
The Growth of IT Exports
Despite the challenges posed by the pandemic and ongoing global trade tensions, IT exports from India have shown remarkable resilience. In the fiscal year 2025, IT exports surged by 12.48% to an estimated $224.4 billion, up from $199.5 billion in the previous year. This growth follows a slower increase of just 2.83% in FY24, highlighting the sector’s recovery trajectory.
Over the past five years, IT exports have consistently grown, albeit with fluctuating rates. The growth rates for FY23, FY22, and FY21 were recorded at 8.98%, 17.01%, and 3.4%, respectively. The Indian government attributes this sustained growth to the expansion of software exports facilitated by the STPI scheme, which has enabled STPI-registered units to achieve exports totaling ₹10.64 lakh crore in 2024-25.
Conclusion
As the Indian IT sector continues to navigate a complex global landscape, the government’s willingness to consider industry feedback is crucial. The potential transformation of the GST portal into a single digital window for IT export reporting could significantly enhance operational efficiency and reduce bureaucratic hurdles. However, the proposed EDF and its associated limitations pose challenges that could undermine the sector’s growth. The ongoing discussions between MeitY and Nasscom will be pivotal in shaping the future of IT exports in India, ensuring that the industry remains competitive on the global stage.
