Cabinet likely to consider Nirvik scheme on Wednesday to give fillip to export credit

The Union Cabinet is expected to consider on Wednesday approval of the Nirvik (Niryat Rin Vikas Yojana) scheme, which aims to ease lending process and enhance loan availability to exporters, an official said.

The commerce ministry proposes to subsidise the premium under the scheme that has to be paid by exporters of certain key sectors, the official said.

Under the scheme, also called the Export Credit Insurance Scheme (ECIS), the insurance cover guaranteed could cover up to 90 per cent of the principal and interest.

The insurance cover may include both pre- and post-shipment credit.

The Export Credit Guarantee Corporation currently provides credit guarantee of up to 60 per cent loss.

The development assumes significance as exporters have raised concerns over availability of credit.

The ministry has also proposed reduction in insurance premium rates to 0.6 per cent for small exporters having an outstanding limit of less than Rs 80 crore. Above this, the rate could be 0.72 per cent.

Further, premium rates for exporters having outstanding limit of over Rs 80 crore will be streamlined with a view to help them.

Such exporters will be divided into categories such as non-gold, jewellery and diamond.

This is being done as insurance claim ratio for gold, jewellery and diamond players are high and that impacts banks' lending ability.

The scheme was announced by Finance Minister Nirmala Sitharaman to boost exports on September 14, 2019.

Exports during April-December 2019 have dipped 1.96 per cent to USD 239.29 billion.