- The Cabinet Committee on Economic Affairs (CCEA) approved a capital infusion of Rs. 2,000 crore into the Export Credit Guarantee Corporation (ECGC) to be infused over the three financial years 2017-20.
- The CCEA also approved the contribution of grant-in-aid of Rs. 1,040 crore to the National Export Insurance Account Trust (NEIA).
About Export Credit Guarantee Corporation (ECGC)
- ECGC is a premier export credit agency of the Government of India to provide 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.
- More than 85% of customers benefitted by ECGC’s covers are MSMEs.
- ECGC covers exports to around 200 countries in the world.
Benefits from infusion
- The infusion would enhance insurance coverage to MSME exports and strengthen India’s exports to emerging and challenging markets like Africa, CIS and Latin American countries.
- 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.
- 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 positon of India exporters in International markets.
NEIA and benefits from infusion
- National Export Insurance Account (NEIA) is a fund set up in 2006 with an approved corpus of Rs. 2000 Crore as a Public Trust by the Ministry of Commerce and Industry to promote project exports from India.
- NEIA also supports projects exports which have long credit period for repayment and which are beyond the underwriting capacity of the Export Credit Guarantee Corporation (ECGC).
- The infusion of corpus would strengthen NEIA to support project exports from the country that are of strategic and national importance.