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This has reference to the editorial ‘Doing Business with Iran’ (Business Line, November 30). It’s true that State Bank of India not negotiating the Letter of Credit (LC) opened by Iranian banks will affect tea exports to that country and have negative implications for Indian exporters. But there is an equally, if not more, reliable alternative to mitigate export credit risk.

Indian tea exporters to Iran, for instance, can approach the Export Credit Insurance Corporation (ECGC) of India and get suitable cover. ECGC has been established for the very purpose of promoting exports through providing insurance cover to exports on credit terms and it is a fitting alternative for LCs.

Hence it is advisable for exporters not to waste time arguing about the manner in which SBI has acted in dealing with the Iranian LC. Instead, they should take ECGC cover and get rid of the risk.

By doing this, tea exporters will get experience doing business without waiting for the foreign buyer to open an LC (which is slowly losing its attraction in foreign trade).

P. S. Velmurugan, Pondicherry

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