Export Credit Guarantee Corporation of India

What exactly is the Export Credit Guarantee Corporation (ECGC)?

The Export Credit Guarantee Corporation of India is primarily an export promotion institution that aims to boost the competitiveness of Indian exports by providing credit insurance protection.

ECGC has explored a variety of export credit risk insurance packages to meet the demands of Indian exporters over the years. This business was established to ensure the smooth operation of Indian exporters by reducing the risks involved with payments from other countries. This insurance coverage given by ECGC also aids Indian exporters in obtaining better credit terms from banks and other financial organisations.

ECGC is the world’s fifth largest credit insurance firm dealing with exports. The Export Credit Guarantee Corporation of India protects exporters from nonpayment by importers. Financial institutions are better positioned to lend and provide larger credit to exporters because of this insurance coverage. ECGC also provides credit ratings and information on other countries, as well as the risks associated with doing business with or in such countries.

What is the role of an ECGC?

It provides Indian exporters with a variety of credit risk insurance options to protect them from losses related to the export of their goods and services.
It provides banks and other financial institutions with Export Credit Insurance coverage so that exporters can get better service from them.

It provides Overseas Investment Insurance to Indian enterprises that participate in overseas joint ventures (JVs) through loans or equity.

How does the ECGC assist exporters?

The ECGC protects Indian exporters from payment concerns by providing insurance. It aids exporters in a variety of ways, including:

• Providing direction for export-related operations
• Making information about various countries and their credit ratings public.
• Making it easier for banks and other financial institutions to provide export financing
• assisting Indian exporters in the collection of bad debts
• Providing information about foreign purchasers’ creditworthiness ECGC also protects exporters’ credit risks from both political and commercial hazards, as well as guarantees payment to exporters.

ECGC provides a variety of insurance options, which can be divided into the following categories:

• Standard rules to shield Indian exporters from credit risks in other countries
• Policies on construction projects and services
• Financial Security Guarantees
• Policies that are unique Exporters can choose from the following types of guarantees provided by the ECGC:
• Guarantee for export financing
• Credit guarantee for packing
• Export credit guarantee after shipment
• Guaranteed financing for export production
• Assurance of transfer
• Assurance of export performance
• The Export Credit Guarantee Corporation of India has shown to be beneficial to Indian exporters throughout the years. It compensates Indian exporters for 80 to 90% of their losses. The remaining 10 to 20% of the loss must be paid solely by the exporters.

It does not, however, cover the following risks:

• Exchange rate swings result in a loss of money.
• Failure of the buyer in another country to get import licence or exchange
• The exporter’s or his agent’s default
• Any loss incurred as a result of a quality dispute
• Inherent in the essence of things is risk.