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Our Bureau

Mumbai, Nov. 18 Nearly a dozen Indian exporters, mainly of textiles, are facing payment defaults to the tune of Rs 100 crore by US importers who have gone bankrupt.

These exporters have now approached Export Credit Guarantee Corporation (ECGC) for insurance claims.

The defaulting US buyers are among those forced to wind up their business due to the financial crisis that hit the American economy.

An ECGC official told Business Line that the potential claims from Indian exporters to the US as of now is estimated at around Rs 100 crore. It may take a month or two to get a clear picture on the actual number of defaults and the amount involved, the official said. There could also be cases related to exports to the US through other countries, he said.

The Rs 100-crore potential claims are over and above the normal claims received by ECGC from Indian exporters. This year, up to October-end, it has settled claims worth Rs 160 crore. The corporation would be able to settle these claims from its own resources, the official said.

The corporation has witnessed an increase in demand for insurance cover from exporters following the global financial crisis that hit several economies across the world.

Realising the situation, ECGC has stopped giving credit guarantee cover to new exporters who are seeking single buyer cover.

However, existing customers will continue to get all types of cover. “We have not placed any restriction on giving insurance policies, except that we would advice the exporters to choose our whole turnover cover instead on single buyer cover” said the official.

ECGC has no proposal to hike the premium despite seeing the potential claims from exporters to the US. It has also not lowered the libaility percentage of the cover, the official said

More Stories on : Textiles | Exports & Imports

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