Gems & Jewellery News

Enhanced insurance cover for exporters


Export Credit Guarantee Corp. of India (ECGC) on Tuesday introduced a new scheme to provide enhanced export credit risk insurance, amid heightened uncertainties in global trade.

The scheme provides enhanced export credit risk insurance cover up to 90% to support small exporters under the Export Credit Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB- WTPC & PS).

“By giving 90% cover to banks, we expect more small companies to get export credit from banks, benefiting these industries greatly. We expect banks to provide more concessions. The net effect will be a benefit to exporters, involving a reduction in interest rate,” ECGC chairman M. Senthilnathan said at a press conference.

EXIM Bank MD Harsha Bangari had said in an interview to Mint earlier that the export costs are rising as ships are not available due to the Russia-Ukraine conflict. Besides, exporters said the transportation cost in certain routes have more than doubled following the war. The enhanced cover shall be available for manufacturer-exporters availing fund-based export credit working capital limit up to 20 crore (i.e., total packaging credit and post-shipment limit per exporter/exporter-group) excluding gems, jewellery and diamond sector and merchant exporters/traders, the commerce ministry said.

This new scheme will enable the banks holding ECGC’s WT-ECIB cover to explore the possibility of reducing interest rates further so that all the stakeholders are benefitted, the ministry said, adding that the enhanced cover percentage shall be made available to SBI as per the previous year’s premium rate in view of its favourable claim premium ratio.

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