Updated: September 30, 2021 12:28:50 am
In a bid to boost exports, the Union Cabinet on Wednesday approved a capital infusion of Rs 4,400 crore in state-owned Export Credit Guarantee Corporation (ECGC) over five years as well as plans to list the export insurer via an initial public offering (IPO).
It also cleared capital infusion of Rs 1,650 crore in the National Export Insurance Account (NEIA) to boost project exports.
“The infusion of this Rs 4,400 crore will enable ECGC to write insurance policies covering exports of an additional Rs 88,000 crore,” Commerce Minister Piyush Goyal said at a press briefing. He added the move would primarily benefit MSMEs which form 97 per cent of the client base of ECGC.
The state-run ECGC provides credit insurance services to exporters against non-payment risks by overseas buyers as well as insurance cover to banks against risks in lending to exporters.
Goyal said the government would immediately infuse Rs 500 crore in ECGC and another Rs 500 crore next fiscal, with the rest set to be made available as required. ECGC currently has an 85 per cent market share for export credit insurance in the country and provided support to exports worth Rs 6.02 lakh, or 28 per cent of merchandise exports, in FY21. The Rs 4,400-crore fund infusion could support additional exports of Rs 5.28 lakh crore over five years.
The Cabinet also approved a Rs 1,650-crore capital infusion to the NEIA trust over five years, a move that could support project exports of up to Rs 33,000 crore, help create 2.6 lakh new jobs and Rs 25,000 crore of additional turnover of domestically manufactured goods.
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