For your usage, which is mostly highway driving with occasional rural roads and long trips, the Mahindra XUV 7XO diesel manual is the better fit. It offers a more relaxed and effortless driving experience, especially over long distances. An important point in your case is what you are upgrading from. Your Jeep Compass diesel uses a 2.0-litre engine, and moving to the Kia Seltos diesel, which has a smaller 1.5-litre engine, will not feel like an upgrade in terms of performance. It will feel adequate, but not significantly stronger than what you are used to. The XUV 7XO, on the other hand, also uses a larger 2.0-litre diesel engine, and despite being a bigger car, it will feel like a proper step up. You will notice stronger pulling power, more effortless highway cruising and better overall performance. It also feels more stable and composed at speed, which suits your kind of long-distance driving. Refinement levels are also good, making it a comfortable car for extended journeys.
The Seltos diesel is easier to drive in the city and feels more compact and user-friendly, but on highways and rough rural roads, it does not feel as robust or as planted as the 7XO.
One important point is the budget. The 7XO diesel variants may go slightly above your Rs 18 lakh on-road range, depending on the variant and location, so you will need to check exact pricing.