{"id":32963,"date":"2021-07-15T12:07:18","date_gmt":"2021-07-15T06:37:18","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=32963"},"modified":"2021-11-15T15:02:59","modified_gmt":"2021-11-15T09:32:59","slug":"how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters\/","title":{"rendered":"How Export Credit Guarantee Corporation is a boon for Indian Exporters?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Export Credit Guarantee Corporation is a government-driven institution that incentivizes export activities by providing credit insurance covers to the exporters. Since its establishment, ECGC has rolled out multiple export credit risk insurance products for Indian exporters. This institution was established for averting potential issues of Indian exporters by mitigating the risks linked with the payment coming from other countries. The insurance coverage of ECGC also enables the exporters to access various credits options available at banks and other financial avenues. ECGC is the 5<sup>th<\/sup> largest credit insurance corporation in the world that deals with exportation activities. Export Credit Guarantee Corporation of India renders a slew of protection benefits against the payment risk for the exporter. Owing to this protection, financial institutions are now offering larger credit to exporters. ECGC also facilitates credit rating and shares info on various nations and risks linked with executing business with\/in those nations. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters\/#Services_offered_by_the_Export_Credit_Guarantee_Corporation\" >Services offered by the Export Credit Guarantee Corporation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters\/#How_does_ECGC_strengthening_Indian_Exporters\" >How does ECGC strengthening Indian Exporters?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters\/#How_ECGC_Supporting_Micro_Exporters_in_India\" >How\nECGC Supporting Micro Exporters in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters\/#An_Overview_on_Small_Exporter_Policy_offered_by_ECGC\" >An\nOverview on Small Exporter Policy offered by ECGC<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/how-export-credit-guarantee-corporation-is-a-boon-for-indian-exporters\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Services_offered_by_the_Export_Credit_Guarantee_Corporation\"><\/span>Services offered by the Export Credit Guarantee Corporation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>It facilitates a slew of credit risk insurance covers to the exporters against the loss related to the exportation of their goods and services <\/li><li>It offers Export Credit Insurance covers to different financial avenues, including banks for empowering exporters to pinpoint better services from them.<\/li><li>It renders Overseas Investment Insurance the Indian establishments investing in Joint Ventures (JVs) abroad by way of equity or loan. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_ECGC_strengthening_Indian_Exporters\"><\/span>How does ECGC strengthening Indian Exporters? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Export\nCredit Guarantee Corporation facilitates the insurance coverage to the exporter\nagainst the risk of non-payment. It enables the exporters in many ways which\ninclude:<\/p>\n\n\n\n<ul><li>Providing end-to-end support for export-related activities. <\/li><li>Making details available related to various nations with their credit ratings. <\/li><li>Empowering banks and related avenues facilitates easy finance to the exporters. <\/li><li>Enabling Indian exporters to effectively counter the bad debts. <\/li><li>Providing detail regarding the creditworthiness of the overseas buyer.<\/li><li>ECGC also insures credit risks of the exporter against both commercial and political conditions and assures guaranteed to the exporters. <\/li><\/ul>\n\n\n\n<p>So the next time when you plan to ship your product abroad with basic documentation like <a href=\"https:\/\/corpbiz.io\/iec-registration\"><strong>IEC<\/strong><\/a> and packing list, do not forget to protect your cargo with the ECGC scheme. <\/p>\n\n\n\n<p><strong><em>Export\nCredit Guarantee Corporation facilitates many types of insurance products which\nare classified into the following groups: <\/em><\/strong><\/p>\n\n\n\n<ul><li>Standard policies that insures\nexporters against foreign credit risks<\/li><li>Construction works and services\npolicies<\/li><li>Financial Guarantees<\/li><\/ul>\n\n\n\n<p><strong><em>Special\npolicies&nbsp;facilitate the following types of guarantees to the Indian exporters:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/types-of-guarantees-to-the-Indian-exporters.png\" alt=\"types of guarantees to the Indian exporters\" class=\"wp-image-32968\" width=\"513\" height=\"377\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/types-of-guarantees-to-the-Indian-exporters.png 998w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/types-of-guarantees-to-the-Indian-exporters-300x221.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2021\/07\/types-of-guarantees-to-the-Indian-exporters-768x566.png 768w\" sizes=\"(max-width: 513px) 100vw, 513px\" \/><\/figure><\/div>\n\n\n\n<p>Export Credit Guarantee Corporation of India has already\nproven its worth in the exporting landscape. It pays around 80-90% of loss\ntriggered by the bad debt or non-payment of the importers. The remaining 10-20%\nof the loss is supposed to be addressed by the exporters.<\/p>\n\n\n\n<p><strong><em>However, it doesn\u2019t ensure the protection against the risks mentioned below: <\/em><\/strong><\/p>\n\n\n\n<p>i. Exchange loss incurred by the fluctuating\nexchange rates<\/p>\n\n\n\n<p>ii. Importer failing to avail import authorization\nor exchange <\/p>\n\n\n\n<p>iii. A default occurred on the part of exporters or\nhis agent <\/p>\n\n\n\n<p>iv. Any loss incurred owing to dispute in quality <\/p>\n\n\n\n<p>v. Risk which is apparent in the nature of goods<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/iec-registration-for-small-business\/\">IEC Registration for Small Business: All you Need to Know <\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_ECGC_Supporting_Micro_Exporters_in_India\"><\/span>How\nECGC Supporting Micro Exporters in India? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Export\nCredit Guarantee Corporation has a lucrative scheme to incentivize micro\nexporters in India. The scheme was introduced by the name of Micro Exporter\nPolicy (MEP). Exporters generating less than Rs 1 crores of annual export\nrevenue are eligible to access this scheme. The policy term offered under this\nscheme remains valid for one year. Furthermore, the processing charge has been\ncapped at Rs 1000 which seems reasonable considering the amount of financial\nrisk it covers. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Salient\nFeatures of Micro Exporters Policy<\/h3>\n\n\n\n<ul><li>Policy Term: 1 year <\/li><li>Maximum loss limit: INR 15 lakh<\/li><li>Processing Fee: INR 1000<\/li><li>Premium: INR 25000<\/li><li>Defense Percentage: 90%<\/li><li>Single loss limit: INR 5 lakh<\/li><li>Waiting Period: 2 months from due\ndate<\/li><li>Report of Overdue: 60 days from due\ndate<\/li><\/ul>\n\n\n\n<p><strong><em>Risk\nCovered to foreign Buyers:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Insolvency of the buyer. <\/li><li>Failure to address payment by the\nbuyer within the given timeframe, which is essentially up to 2 months from the\ndue date. <\/li><li>Non-acceptance of goods subjected to\nspecific conditions. <\/li><\/ul>\n\n\n\n<p><strong><em>Risk of\nthe financial institute opening the letter of credit (LC)<\/em><\/strong><\/p>\n\n\n\n<ul><li>The bankruptcy of the<em><strong> financial institute<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Financial_institution\"><em><strong>[1]<\/strong><\/em><\/a><\/sup> opening the letter of credit<\/li><li>Failure of the financial institute opening the letter of credit to address the payment within the given timeframe, which is generally two months from the due date. <\/li><\/ul>\n\n\n\n<p><strong><em>Political\nrisk<\/em><\/strong><\/p>\n\n\n\n<ul><li>Government approves to the buyer\u2019s\nnation or any other government measure that may hinder or defer payment transfers\nmade by the buyer.<\/li><li>War or civil commotion in the buyer\u2019s\nnation. New import limitation or revocation of legit import licenses.<\/li><li>Hassles encountered by the exporter\u2019s\nshipment outside India such as re-routing or diversion incurring more expenses\nin terms of freight or insurance charges which are unrecoverable. <\/li><li>Any cause of damage occurring beyond\nIndian Territory for which protection is rendered by the insurer and which is\nbeyond the control of both buyer and the exporter. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"An_Overview_on_Small_Exporter_Policy_offered_by_ECGC\"><\/span>An\nOverview on Small Exporter Policy offered by ECGC<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\nSmall Exporter Policy is essentially a standardized policy under which marginal\nimprovements have been done to incentivize small exporters to avail and operate\nthe policy.&nbsp; It is available to exporters\nwhose annual turnover does not exceed Rs.500 lakhs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Salient\nFeatures of the Small Exporters Policy:<\/h3>\n\n\n\n<p><strong><em>Policy Term<\/em><\/strong><\/p>\n\n\n\n<p>12 months <\/p>\n\n\n\n<p><strong><em>Minimum Premium<\/em><\/strong><\/p>\n\n\n\n<p>Rs.5,000\/- The no claim bonus rate facilitated per\nyear is 5% of the premium rate<\/p>\n\n\n\n<p><strong><em>Waiting Period for Claims<\/em><\/strong><\/p>\n\n\n\n<p>2 months<\/p>\n\n\n\n<p><strong><em>Declaration of Overdue Payments<\/em><\/strong><\/p>\n\n\n\n<p>Small exporters must furnish payment declarations\non a monthly basis which are overdue for a timeframe surpassing 60 days.<\/p>\n\n\n\n<p><strong><em>Shipment Announcement<\/em><\/strong><\/p>\n\n\n\n<p>Shipment ought to be declared monthly<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Payment defaults are quite prominent in the international trading of goods and services. Even with the best trading practices, you are not entirely isolated from these mishaps. And that\u2019s where Export Credit Guarantee Corporation comes into the picture. It not only protects your shipment from possible payment default but also enables you identity the importer\u2019s genuineness through the credit rating. <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/documents-required-for-iec-registration-india\/\">A Complete Guide on Documents Required For IEC Registration <\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Export Credit Guarantee Corporation is a government-driven institution that incentivizes export activities by providing credit insurance covers to the exporters. Since its establishment, ECGC has rolled out multiple export credit risk insurance products for Indian exporters. This institution was established for averting potential issues of Indian exporters by mitigating the risks linked with the payment [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":32974,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[165],"tags":[1862],"acf":{"service_id":"16"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":4895,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/32963"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=32963"}],"version-history":[{"count":18,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/32963\/revisions"}],"predecessor-version":[{"id":32984,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/32963\/revisions\/32984"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/32974"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=32963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=32963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=32963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}