NEW DELHI : Government under the leadership of Hon’ble Prime Minister Shri Narendra Modi has undertaken a series of measures to provide a boost to the exports sector. In line with this, the Government has today approved capital infusion of ₹4,400 crore to ECGC Ltd. (formerly known as Export Credit Guarantee Corporation of India Ltd.) over a period of five years, i.e. from FY 2021-2022 to FY 2025- 2026. The approved infusion along with efforts made to suitably synchronize with the listing process of ECGC through the Initial Public Offering will increase the underwriting capacity of ECGC to support more exports.
Capital Infusion and planned IPO to increase ECGC’s underwriting capacity up to ₹88,000 crore and propel additional exports of Rs. 5.28 lakh crore over a five-year period ,will help create 59 lakh new jobs including 2.6 lakh in formal sector.This decision is part of a series export related schemes and initiatives taken by the Government over the last few years as mentioned below.
Various Export Related Schemes and Initiatives taken by Govt. in last few years
- Foreign Trade Policy (2015-20) extended upto 30-09-2021 due to the COVID-19 pandemic situation
- Rs 56,027 crore released in September 2021 to liquidate all pending arrears under all script base Schemes to provide liquidity in the COVID-19 times
- Roll out of a new Scheme – Remission of Duties and Taxes and Exported Products (RoDTEP). Rs 12,454 crore sanctioned for the Scheme in the FY 2021-22. It is a WTO compatible mechanism for reimbursement of taxes/ duties/ levies, which are currently not being refunded under any other mechanism, at the central, state and local level
- Support to textiles sector was increased by the remission of Central/ State taxes through the ROSCTL scheme, which has now been extended till March 2024
- Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase FTA utilization by exporters
- A comprehensive “Agriculture Export Policy” to provide an impetus to agricultural exports related to agriculture, horticulture, animal husbandry, fisheries and food processing sectors, is under implementation
- Promoting and diversifying services exports by pursuing specific action plans for the 12 Champion Services Sectors
- Promoting districts as export hubs by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district
- Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced
- Package announced in light of the covid pandemic to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports
- Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme and Transport and Marketing Assistance (TMA) schemes to promote trade infrastructure and marketing.
About ECGC Ltd.
ECGC was established by the Government of India under Companies Act in 1957 to promote exports by providing credit insurance services to exporters against non- payment risks by the overseas buyers due to commercial and political reasons. It also provides insurance covers to banks against risks in export credit lending to the exporter borrowers. ECGC endeavours to support the Indian export industry with its experience, expertise and underlying commitment to progress and advance of India’s exports.
ECGC plays a wider role in supporting exports from labour-intensive sectors and encourage bank lending to enterprises of small exporters thereby leading to their revival. Capital infusion in ECGC will enable it to expand its coverage to export oriented industry particularly labour-intensive sectors. The approved amount will be infused in instalments thereby increasing 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 in line with the existing pattern.
In addition, in terms of the report ‘Export to Jobs’ published by World Bank and International Labour Organisation in February 2019, ₹5.28 lakh crore exports will lead to formalization of 2.6 lakh workers. Further, the total number of workers (both formal and informal) will increase by 59 lakhs as per the report.
ECGC – Performance highlights
- ECGC is a market leader with around 85% market share in export credit insurance market in India
- Export supported by ECGC was Rs.6.02 lakh crore in 2020-21, which is around 28% of India’s merchandise exports
- Number of distinct exporters benefitted are 7,372 and 9,535 under Export Credit Insurance for Banks as of 31/3/2021, 97% of which are small exporters
- ECGC insures around 50% of total export credit disbursement by banks, covering 22 banks (12 Public Sector Banks and 10 Private Sector Banks)
- ECGC has a database of over five lakh overseas buyers
- It has settled claims more than Rs.7,500 crore in the last decade
- It has invested $ 11.7 million in Africa Trade Insurance (ATI) so as to facilitate Indian exports to African market
- ECGC has shown continuous surplus and made dividend payments to the Govt. for last 20 years