Consultants Shortlisted For Ecgc Recast

One of these consultants will be selected shortly and will thereafter submit a package for ECGC within six months, said D Chatterjee, additional secretary in the commerce ministry who is also the ECGC chairman & managing director. According to Chatterjee, the restructuring would take into account complete diversification of business and a re-look into existing policies.

At present ECGC provides cover to only 17 per cent of the Indian exports. In order to maximise business, the corporation is considering to increase the number of policies to provide opportunities to exporters to have various options. However, policy matters are being studied and much of it is still in the drawing board stage. The ECGC proposes to increase the number of export centres in the country which in a way would facilitate export promotion.

 

We are thinking of setting up a export centre at Patna in the eastern region, said Chatterjee.

ECGC is exploring possibilities of relaxing underwriting norms on provision of guarantee on credit terms for Russian and countries in the Commonwealth of Independent States (CIS).

At present, the Russian and the CIS countries import 80 per cent Indian goods under the debt repayment scheme and the remaining 20 per cent is exported against LCs. However, this proposition has to be analysed in detail as these countries, which suffer a shortage of foreign exchange, are perceived to have high risks associated with it.

Currently, the ECGC provides cover against LCs to the high-risk countries, including Russia and CIS countries, Iraq and few African countries with an adverse balance of payments. Over Rs 200 crore payments is locked up with African countries alone. The ECGC is yet to retrieve payments from Sudan which is almost Rs 32 crore from Calcutta only, said Chatterjee. The corporation has also decided to work out a specific policy for Iran, where exporters who do not have a ECGC policy will also be provided cover against a higher premium. This is a way to bring larger number of exporters under the ambit of ECGC, said Chatterjee.

ECGC provides restricted cover to almost 56 countries, where every contract is looked into on a case-to-case basis. Tea being one of the major commodities exported to Russia, almost 64 per cent is routed through Calcutta, 20 per cent from Cochin, 12 per cent from Bombay, 2 per cent from Delhi and 1 per cent each from Bangalore and Hyderabad.

Tea exports from India have slid from 27 to 14 per cent in the last 20 years. In its bid to regain a 25 per cent share in the world market, the export credit agency with mutual collaborations with banks could help facilitate timely and adequate finance to exporters.