Move will help ECGC provide cost-effective credit insurance to exporters: Centre
The Cabinet Committee on Economic Affairs on Wednesday approved a capital infusion of ?2,000 crore into the Export Credit Guarantee Corporation (ECGC) to be infused over the three financial years 2017-20.
The break-up of the infusion would be ?50 crore in 2017-18, ?1,450 crore in 2018-19, and ?500 crore in 2019-20.
“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,” the government said in a release. “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.”
The increased capital infusion would also help ECGC to diversify its product portfolio and provide cost-effective credit insurance to exporters, the government said.
“Covers from ECGC will help in improving competitive position of India exporters in international markets,” the government said. “More than 85% of customers benefited by ECGC’s covers are MSMEs. ECGC covers exports to around 200 countries in the world.”
Separately, the Cabinet Committee on Economic Affairs also approved the contribution of grant-in-aid of ?1,040 crore to the National Export Insurance Account Trust (NEIA). “The corpus is to be utilised during three years from 2017-18 to 2019-20,” the government said.
“An amount of ?440 crore has already been received for the year 2017-18. ?300 crore each will be given to NEIA for the years 2018-19 and 2019-20. The corpus would strengthen NEIA to support project exports from the country that are of strategic and national importance,” the Centre added.