The Export Credit Guarantee Corporation of India Limited (ECGC) is a government-owned credit insurance company in India. It was established in 1957 to promote and support Indian exports by providing credit insurance services.
ECGC plays a crucial role in facilitating international trade by mitigating the risks associated with exporting goods and services. Here are some key features and functions of ECGC:
Credit Insurance: ECGC provides credit insurance to exporters to protect them against the risk of non-payment by overseas buyers. This coverage helps exporters manage the commercial and political risks associated with international trade.
Export Credit: ECGC facilitates export credit by offering various insurance products that cover both short-term and long-term credit risks. This allows exporters to offer credit terms to their buyers without exposing themselves to the risk of non-payment.
Risk Assessment: ECGC assesses the creditworthiness of overseas buyers and provides credit reports to exporters. This helps exporters make informed decisions about trading on credit with specific buyers and markets.
Policy Types: ECGC offers different types of insurance policies, including Whole Turnover Policies, Specific Buyer Policies, and Export Turnover Policies. These policies cater to the diverse needs of exporters.
Claims Settlement: In case of non-payment by an overseas buyer due to commercial or political reasons, exporters can file claims with ECGC. The corporation then compensates the exporter for the covered loss.
Market Intelligence: ECGC provides market intelligence and information on various countries and sectors to help exporters identify potential markets and assess risks.
Export Promotion: ECGC actively collaborates with other institutions and organizations to promote Indian exports. It supports initiatives aimed at expanding the international presence of Indian businesses.
Government Support: ECGC operates as a public sector company under the administrative control of the Ministry of Commerce & Industry, Government of India. The government provides support to ECGC to fulfill its mandate of supporting and promoting Indian exports.
ECGC plays a crucial role in boosting the confidence of Indian exporters to explore new markets and expand their global footprint by mitigating the financial risks associated with international trade.
ECGC, a wholly-owned government enterprise, that is mandated to boost competitiveness of the Indian exports by providing them with credit insurance covers, had provided credit cover for exporters worth Rs 6.68 trillion in FY23.
Recently, the union government has been mulling over using alternate trade routes and has asked the Export Credit Guarantee Corporation (ECGC) not to raise insurance premiums amid the rising cost of shipping to Europe amid rising tensions in the Red Sea region.
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