The approved capital injection as well as efforts to synchronize with Export Credit Guarantee Corporation Ltd’s listing process through the Initial Public Offering are expected to increase ECGC’s underwriting capacity to support more exports.
The Cabinet Committee on Economic Affairs approved a capital injection of 4,400 yen crore to ECGC Ltd over a five-year period from 2021-2022 to 2025-2026. “The injection of capital into the ECGC will allow it to extend its coverage to the export-oriented industry, especially the labor-intensive sector,” he said in a statement. communicated.
The approved amount will be paid in installments and will help increase the underwriting capacity of risks up to 88,000 crore of, which will allow the ECGC to issue hedges that can support additional exports of 5.28 crore of ₹ over the five year period. noted.
This will help ECGC provide insurance coverage to around 25,000 exporters out of the current level of 12,000 exporters, most of whom are small exporters.
ECGC has paid claims of over 7,500 crore over the past decade to exporters and banks. “It will also allow ECGC to diversify its product portfolio and provide cost-effective credit insurance helping exporters to gain a stronger foothold in difficult markets,” he added.
Also Read: Cabinet Approves Additional 4,400 Crore Capital Infusion Into ECGC
At present, ECGC covers 239 countries around the world and the capital injection will help improve the competitive position of Indian exporters in international markets. The ECGC said it was also increasing its engagement with other channels, such as brokers, to increase business.
It has also initiated the issuance of foreign currency export credit insurance coverage through its office in GIFT CITY, Gujarat. “Once authorized, will also extend foreign currency hedges to exporters outside of SEZs,” he said.