New Delhi: The Central Government under the leadership of Prime Minister Narendra Modi has undertaken a series of measures to provide a boost to the exports sector. In line with this, the government has approved capital infusion of Rs 4,400 crore to ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd, over a period of five years, that is, from FY 2021-2022 to FY 2025- 2026. The approved infusion along with efforts made to suitably synchronize with the listing process of ECGC through the Initial Public Offering (IPO) will increase the underwriting capacity of ECGC to support more exports.
The ECGC was established by the Government of India under Companies Act in 1957 to promote exports by providing credit insurance services to exporters against non- payment risks by the overseas buyers due to commercial and political reasons. It also provides insurance covers to banks against risks in export credit lending to the exporter borrowers. ECGC endeavours to support the Indian export industry with its experience, expertise and underlying commitment to progress and advance of India’s exports.
ECGC plays a wider role in supporting exports from labour-intensive sectors and encourage bank lending to enterprises of small exporters thereby leading to their revival. Capital infusion in ECGC will enable it to expand its coverage to export oriented industry particularly labour-intensive sectors. The approved amount will be infused in installments thereby increasing the capacity to underwrite risks up to Rs 88,000 crore and this will enable ECGC to issue covers that can support additional exports of Rs 5.28 lakh crore over the five-year period in line with the existing pattern.
ECGC is a market leader with around 85 per cent market share in export credit insurance market in India. Export supported by ECGC was Rs 6.02 lakh crore in 2020-21, which is around 28 per cent of India’s merchandise exports. It has settled claims more than Rs 7,500 crore in the last decade and has invested $ 11.7 million in Africa Trade Insurance (ATI) so as to facilitate Indian exports to African market.
