The government expects a 30% rise in export credit disbursals by the end of 2019-20 through greater insurance coverage of exporters and easier inspection norms.
The commerce and industry ministry will soon approach the Cabinet for reduction in insurance premium rates to 0.6% for small exporters having an outstanding limit of less than Rs. 80 crore.
“For accounts with limits below Rs. 80 crore, the premium rates will be moderated to 0.6% annum and for those exceeding Rs. 80 crore, it will be 0.72% annum for the same enhanced cover,” commerce and industry minister Piyush Goyal said while sharing the details of the new NIRVIK (NiryatRin Vikas Yojna) or Export Credit Insurance Scheme that Export Credit Guarantee Corporation of India has launched. The ECIS will be in force for a period of five-years and inspection of bank documents and records would be mandatory for losses exceeding .Rs. 10 crore as against the present .Rs. 1 crore.
The cover percentage has been enhanced to 90% from the present average of 60% for both principal and interest to include the unpaid interest for a maximum of two quarters or the non-performing asset date, whichever is earlier.
Moreover, after getting an insurance coverage of 90%, small exporters will get loans at competitive rate at about 7.6%. ECGC would cover Rs. 3 lakh crore of loans. The support comes amid export credit disbursement declining 23% in 2018-19 to Rs. 9.57 lakh crore from Rs. 12.39 lakh crore in 2017-18.
