The approved capital infusion along with efforts made to synchronise with the listing process of Export Credit Guarantee Corporation Ltd through the initial public offering is expected to increase the underwriting capacity of ECGC to support more exports.

The Cabinet Committee on Economic Affairs has approved capital infusion of ₹4,400 crore to ECGC Ltd over a five-year period from 2021-22 to 2025-26. “Capital infusion in ECGC, will enable it to expand its coverage to export-oriented industry particularly labour-intensive sector,” it said in a statement.

The approved amount will be infused in instalments and will help increase the capacity to underwrite risks up to ₹88,000 crore and this will enable ECGC to issue covers that can support additional exports of ₹5.28-lakh crore over the five-year period, it further said.

Small exporters

This will help ECGC to provide insurance cover to around 25,000 exporters from the present level of 12,000 exporters, most of which are small exporters.

ECGC has paid claims of more than ₹7,500 crore during the last decade to exporters and banks. “This will also enable ECGC to diversify its product portfolio and provide cost effective credit insurance helping exporters to gain a stronger foothold in thedifficult markets,” it further said.

Also read: Cabinet approves additional capital infusion of ₹4,400 crore in ECGC

At present, ECGC provides cover to 239 countries across the globe and the capital infusion will help in improving the competitive position of Indian exporters in the international markets. ECGC said it is also in the process of increasing engagements with alternate channels, such as brokers, to increase business.

It has also started the issue of export credit insurance covers in foreign currency through its office in GIFT CITY, Gujarat. “Once permitted, will expand covers in foreign currency to exporters outside SEZs as well,” it said.

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