Largest ECGC credit support likely this yr

Export Credit Guarantee Corporation of India Ltd (ECGC), a public sector credit risk insurance provider that guarantees export credits against payment risks by importers, may give its largest-ever credit support of above Rs 700 crore to domestic firms and banks this financial year.

“The last two years were one of the worst periods for the country’s export sector. The last financial year, we had given a credit support of above Rs 640 crore. However, during this financial year it is expected to be Rs 700-750 crore, the largest in our 53-year-old history. In the first six months, we have already paid a claim of Rs 300 crore,” said Geetha Muralidhar, ECGC executive director, on the sidelines of a CII meeting in Kolkata on Friday. Except China, India and Brazil, exports in all the other countries were struggling to come out of the global financial crisis, she added.

Though the country’s gems and jewellery sector is faring well with above 45 per cent growth, it seems to be a worry for ECGC. “This, along with handicrafts, is the field facing the heat. Last year, we paid a compensation of about Rs 200 crore in the gems and jewellery sector. This year, the claims have already touched Rs 150 crore,” she said.

ECGC, managed by a board of directors comprising representatives from the government, Reserve Bank of India, banking, insurance and the exporter community, is the fifth largest credit insurer in the world in terms of coverage of national exports. The firm currently has 15 products for exporters and multiple products for banks under its portfolio.

Regarding the proposed Foreign Manufacturers Legal Accountability bill by the United States government, she said, “Developed economies are in a panic situation and are trying to implement easy non-tariff barriers. This might affect our industry also. If such regulations happen all of a sudden, we would protect our exporters.”