Indian govt infuses ₹2k cr in Export Credit Guarantee Corp

28 Jun '18
2 min read
Courtesy: Fancycrave.com from Pexels
Courtesy: Fancycrave.com from Pexels

The Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi has approved the capital infusion of ₹2000 crore for strengthening of Export Credit Guarantee Corporation (ECGC). The amount would be infused in the three financial years i.e. ₹50 crore in 2017-18, ₹1,450 crore in the year 2018-19 and ₹500 crore for 2019-20.

ECGC, a premier export credit agency of the Government of India, provides export credit insurance services to facilitate exports from the country. The ECGC offers credit insurance schemes to exporters to protect them against losses due to non-payment of export dues by overseas buyers due to political and/or commercial risks.

The ₹2,000 crore infusion would enhance insurance coverage to micro, small and medium enterprises (MSME) exports and strengthen India’s exports to emerging and challenging markets like Africa, CIS and Latin American countries, an official statement said.

With enhanced capital, ECGC’s underwriting capacity and risk to capital ratio will improve considerably. With a stronger underwriting capacity, ECGC will be in a better position to support Indian exporters to tap new and unexplored markets.

Further, increased capital infusion will help ECGC to diversify its product portfolio and provide cost effective credit insurance helping exporters to gain a stronger foothold in the difficult markets. Covers from ECGC will help in improving competitive position of Indian exporters in international markets.

ECGC covers exports to around 200 countries in the world, and more than 85 per cent of the customers benefited by ECGC’s covers are MSMEs, the statement said. (RKS)

Fibre2Fashion News Desk – India

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