The Export Credit Guarantee Corporation of India Limited (ECGC) has launched a new scheme to provide enhanced export credit risk insurance coverage to small exporters, in response to the increased uncertainty in international trade.
- The scheme offers small exporters increased export credit risk insurance coverage of up to 90% under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).
Significance
- The scheme is likely to benefit a number of small-scale exporters who receive export credit from banks that have the ECGC WT-ECIB cover.
- Additionally, it will give small exporters the chance to explore new markets/new buyers while competitively diversifying their existing product portfolio.
Enhanced Cover to Banks
i. The enhanced cover would be offered to manufacturer-exporters who have received a fund-based export credit working capital limit of up to Rs. 20 crores (i.e., total packaging credit and post shipment limit per exporter/exporter-group), excluding the Gems, Jewellery, and Diamond sector and merchant exporters/traders.
- This new scheme will allow banks with ECGC’s WT-ECIB cover to explore the possibility of further lowering interest rates, benefiting all stakeholders.
ii.In this regard, ECGC has signed up State Bank of India (SBI) under ECIB- WTPC & PS
- Due to its favourable claim premium ratio, the enhanced cover percentage will be made available to State Bank of India (SBI) at the previous year’s premium rate.
- Export credit will be offered by SBI at the repo rate plus 1.3 %.
- However, for other banks, the existing premium rates may rise moderately.
Support Extended by ECGC for Exports
i. In Fiscal Year 2021-22(FY22), the ECGC granted export aid worth Rs.6.18 lakh crore.
ii.As of March 31, 2022, over 6,700 distinct exporters were protected by the direct cover provided to exporters, and over 9,000 distinct exporters were protected by the Export Credit Insurance for Banks (ECIB).
- It should be noted that 96 % of these are small exporters.
Export Credit Guarantee Corporation of India Limited (ECGC)
i. The ECGC is a Government of India (GoI) enterprise that provides export credit insurance to Indian exporters and commercial banks.It is administered by the Ministry of Commerce and Industry (MoCI).
- It is governed by a Board of Directors composed of representatives from the GoI, the Reserve Bank of India (RBI), banking, insurance, and the export community.
ii.Objective: To give credit insurance to Indian exporters in order to boost their competitiveness against foreign competitors. It also maintains the lowest possible premium rates.
iii. ECGC is the world’s seventh largest credit insurer, protecting national exports.
iv.The company currently has a paid-up capital of Rs. 1200 crores and an authorized capital of Rs. 5000 crores.
Recent Related News
In May 2022, Union Minister of State (MoS) Anupriya Patel, MoCI, launched the Indian Business Portal – An International Trade Hub for Indian Exporters and Foreign Buyers in New Delhi, Delhi.
- The portal was designed and developed by the Federation of Indian Export Organisation (FIEO) in partnership with GlobalLinker.
- Its objectives include Digitizing Indian Exporters which further aids to become discoverable online and Promoting exports from all Indian States.
About Export Credit Guarantee Corporation of India Limited (ECGC)
ECGC was established as Export Risk Insurance Corporation (ERIC) in 1957. It was renamed as Export Credit Guarantee Corporation Limited in 1964 and again rechristened as Export Credit Guarantee Corporation of India Limited (ECGC) in 1983.
Chairman cum Managing Director (CMD) – M. Senthilnathan
Headquarters – Mumbai, Maharashtra
