CCEA approves capital infusion in Export Credit Guarantee Corporation

The Cabinet Committee on Economic Affairs (CCEA) has approved the capital infusion of Rs. 2000 crore for strengthening of Export Credit Guarantee Corporation (ECGC) to enhance insurance coverage to micro, small medium enterprises (MSMEs) exports. The amount will be infused in three financial years i.e. Rs.50 crore in 2017-18, Rs.1450 crore in 2018-19 and Rs.500 crore in 2019-20.
Key Facts
The infusion of capital will enhance insurance coverage to MSME exports and strengthen India’s exports to emerging and challenging markets like Africa, CIS (Commonwealth of Independent States) and Latin American countries. With enhanced capital, ECGC’s underwriting capacity and risk to capital ratio will improve considerably.
Significance
With stronger underwriting capacity, ECGC will be in better position to support Indian exporters to tap new and unexplored markets. Increased capital infusion will also help ECGC to diversify its product portfolio and provide cost effective credit insurance which will help exporters to gain stronger foothold in difficult markets. Covers from ECGC will help in improving competitive position of India exporters in International markets. More than 85% of customers benefitted by ECGC’s covers are MSMEs.  ECGC covers exports to around 200 countries in the world.
Background
ECGC is a premier export credit agency of Union Government to provide Export Credit Insurance Services to facilitate exports from the country. It offers credit insurance schemes to exporters to protect them against losses due to non-payment of export dues by overseas buyers due to political or commercial risks.

Month: Current Affairs - June, 2018