Central Government approves capital infusion in Export Credit Guarantee Corporation Ltd. - (27 Jun 2018)
Commercial
The Cabinet Committee on Economic Affairs chaired by Prime Minister has approved the capital infusion of Rs. 2000 crore for strengthening of Export Credit Guarantee Corporation (ECGC). The amount would be infused in the three financial years i.e. Rs.50 crore in 2017-2018, Rs.1450 crore in the year 2018-2019 and Rs.500 crore for 2019-2020. ECGC is a premier export credit agency of the Government of India. The ECGC encourages and facilitates globalization of India’s trade. 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. Further, it facilitates availability of adequate bank finance to the Indian exporters by providing surety insurance covers for bankers at competitive rates.
The step is in wake of enhancing insurance coverage to MSME exports and strengthening India’s exports to emerging and challenging markets like Africa, CIS and Latin American countries. As per the reports, 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 position of India exporters in International markets. More than 85% of customers benefitted by ECGC’s covers are MSMEs. ECGC covers exports to around 200 countries in the world.
Further, the Cabinet Committee on Economic Affairs has also decided to provide Grant-in-Aid (Corpus) of Rs.1,040 crore to National Export Insurance Account Trust (NEIA). The Corpus is to be utilised during three years from 2017-2018 to 2019-2020. An amount of Rs.440 crore has already been received for the year 2017-18. Rs.300 crore each will be given to NEIA for the years 2018-2019 and 2019-2020. The Corpus would strengthen NEIA to support project exports from the country that are of strategic and national importance.
Tags : CAPITAL INFUSION APPROVAL MSME EXPORTS
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