Export credit insurance in India is designed to protect the receivables of an exporter. It means that the insurance tool provides an assurance to the exporter about receiving the amount due from the foreign customer. The insurance pays a portion of the assured value in case the customer or the foreign bank is not able to pay it due to political, commercial, or any other reasons. The ECGC was formed in by the Government of India to promote trade in the country by providing credit risk insurance and related services to exporters. Let us look at some of the advantages of export credit insurance, reasons to - why this is an indispensable asset for anybody shipping goods overseas:.
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Product Country. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. Export Credit Insurance :. What Is Credit Insurance? Trade credit Insurance insures suppliers against the risk of non- payment of goods or services by their buyers This may be a buyer situated in the same country as the supplier Domestic Risk or A buyer situated in another country Exporter Risk. The insurance covers non- payment as a result of insolvency of the buyer or non-payment after an agreed number of months after the due date.
It may also insure the risk of non — payment following an event outside the control of the buyer or seller political risk cover ,for eg. The risk that money cannot be transferred from one country to another. Export credit insurance designed to protect exporters from the consequences of the payment risks , both political and commercial and enable them to expand their overseas business without fear or loss.
Need For Export Credit Insurance :. ECGC has seen raise in number of claims due to defaults and insolvencies. In terms of numbers of claims developed countries have shown steep increase in numbers of claims paid. Export credit insurance is a viable means of securing payment.
It is an effective sales tool. It is also an effective financial tool. Risks Covered :. Products offered to Exporters :.
Functions of Export Credit Guarantee Corporation of India
Objective and Function of ECGC
I have been getting many enquiries about the risk coverage on nonpayment of export proceeds by buyer like How to provide credit to the overseas buyer? Is credit extending to importer safe? How can an exporter provide credit to an un known buyer? What is the remedy to provide credit to an overseas importer? Is there any insurance to cover the risk of nonpayment of export goods value? Is there any insurance to protect the exporter in nonpayment of exported amount Etc.
ECGC's Export Credit Insurance | Importance & Offerings for Indian Exporters
ECGC Ltd. It is managed by an Asset Management Company comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community. The present paid-up capital of the company is Rs. Payments for exports are open to risks even at the best of times. The risks have assumed large proportions today due to the far-reaching political and economic changes that are sweeping the world. An outbreak of war or civil war may block or delay payment for goods exported. A coup or an insurrection may also bring about the same result.
Export Credit Guarantee Corporation of India