Exporters with a credit limit of Rs 20 crore previously used to get an insurance cover of 60 per cent which was only last year increased to 90 per cent.
Piyush Goyal, Union Minister for Commerce and Industry, said that this change will be effective July 1, 2023.
Currently, there four banks associated with the scheme, providing Rs 50 crore credit for exports, and this expansion is set to benefit 3,000 exporters.
Meanwhile, the ECGC has also chosen to extend this cover to another nine banks which in turn will benefit another set of 3,000 exporters.
Goyal mentioned plans to meet more bankers next week to request their alliance with this scheme.
Goyal also explained that with the provision of 90 per cent insurance cover, exporters’ accounts become AA accounts, which enables interest rates to go down. This tag also helps banks when it comes to giving loans.
“With 90 per cent insurance cover, banks have been assured and with this the interest rate has come around repo rate plus 2.2 per cent for all AA rated accounts,” the minister said. “This interest rate will be applicable to the exporters’ with exports up to Rs 50 crore as well.”
Further, he also guaranteed that in the next four to five months, all activities at ECGC will be digitised to quicken the procedure. The resolution of disputes will be done via video conferencing, he said.
M Senthilnathan, Chairman & MD, ECGC India Limited, disclosed various plans in the pipeline including two extra covers for exporters as part of their strategy to expand their market.
He specified that the exporters coming directly to ECGC for their services will be given extra cover depending on their credit limit.
“The target for ECGC is that for FY24 we should be able to support exports for the Rs 10 lakh crore target as set by the Ministry of Commerce and Industry. ECGC is confident of achieving this target,” he said.
Wholly owned Government of India enterprise, ECGC is mandated with improving the competitiveness of the Indian exports by providing them with credit insurance covers.
In March 2023, the Minister had urged the ECGC to think of ways to establish ECGC as an integral part in India’s aim to take its exports to $2 trillion exports by 2030 and a trillion dollar of exports in services and in goods each. India’s overall exports in April 2023, however, were estimated at $65.02 billion showing a positive growth of 2 per cent.
