A government official said the youths - two boys and a girl in their early 20s - were held by forest wardens over the weekend from near the Budang reserved forest, about 100 km west of Sikkim's capital Gangtok.
"The trio were held with about 41 insects ranging from rare species of butterflies to moths. They also possessed equipment for collecting and catching insects," Sikkim's chief wildlife warden N. Bhutia told IANS.
The three youths who claimed to be students from the University de Corte and hailing from Corsica in France pleaded innocent saying they were not aware of local laws.
Under the Indian Wildlife Protection Act of 1972, anybody found killing or trying to smuggle out, endangered species from reserved forest areas could face a maximum penalty of three years in prison.
"The crime they committed by catching insects from the forest could have landed them behind the bars. But we deported them to the adjoining West Bengal state Wednesday after imposing a fine of Rs. 25,000 each after detaining them for four days," the warden said.
Bhutia said the government decided to "relax" the punishment, as the three were young.
"They were all very young students and we decided against taking harsh action purely on humanitarian grounds," the warden said.