The Export Credit Guarantee Corporation of India was established in 1957 by the Government of India to promote exports by providing insurance against payment risks. It offers various credit insurance policies to exporters, including standard policies for shipments under 180 days of credit as well as specialized policies for software and service exports. It also provides guarantee programs to banks to facilitate export financing through measures like packing credit guarantees.

1. Export Credit Guarantee Corporation of
India Limited, was established in the year 1957
by the Government of India to strengthen the
export promotion drive by covering the risk of
exporting on credit.

2. Commercial Risks
• Insolvency of the buyer or L/C opening bank
• Failure of the buyer to make the payment due within a
specified period
• Buyer's failure to accept the goods, subject to certain
conditions

3. Political Risks
• Imposition of restriction by
the Government of the buyer's
country or any Government
action, which may block or
delay the transfer of payment
made by the buyer
• War, civil war, revolution or
civil disturbances in the
buyer's country.
• New import restrictions or
cancellation of a valid import
license in the buyer's country

4. ECGC Help To Exporters
• Offers insurance protection to exporters against payment
risks
• Provides guidance in export-related activities
• Makes available information on different countries with
its own credit ratings
• Makes it easy to obtain export finance from
banks/financial institutions
• Assists exporters in recovering bad debts

5. Policies & Products
Credit Insurance Policies

6. SCR or Standard Policy
• Shipments (Comprehensive Risks) Policy, commonly
known as the Standard Policy, is the one ideally suited to
cover risks in respect of goods exported on short-term
credit, i.e. credit not exceeding 180 days.
• This policy covers both commercial and political risks
from the date of shipment
• It is issued to exporters whose anticipated export
turnover for the next 12 months is more than Rs.50 lacs.

7. Small Exporters Policy
• It is issued to exporters whose anticipated export
turnover for the period of one year does not exceed
Rs.50 lacs.

8. Export (Specific Buyers) Policy
Buyer wise Policies - Short Term (BP-ST)provide cover
to Indian exporters against commercial and political
risks involved in export of goods on short-term credit to
a particular buyer.

9. Export Turnover Policy
• Turnover policy is a variation of the standard policy for
the benefit of large exporters who contribute not less
than Rs.10 lacs per annum towards premium. Therefore
all the exporters who will pay a premium of Rs. 10 lacs in
a year are entitled to avail of it.

10. Service Policy
• Where Indian companies conclude contracts with
foreign principals for providing them with technical or
professional services, payments due under the contracts
are open to risks similar to those under supply contracts.
In order to give a measure of protection to such
exporters of services, ECGC has introduced the Services
Policy

11. Software Project Policy
• It was found that the general services policy does not
meet with the exact requirements of software exporters.
It was therefore decided to introduce a new credit
insurance cover to meet the needs of the software
exporters, namely, software projects policy, where the
payments will be received in foreign exchange

12. Specific Policy for Supply Contract
• Contracts for export of capital
goods or turnkey projects or
construction works or rendering
services abroad are not of a
repetitive nature and they involve
medium/long-term credits.
• Such transactions are, therefore,
insured by ECGC on a case-to-
case basis under specific policies

13. Policies & Products
Guarantees to Banks

14. Packing Credit Guarantee
• The Packing Credit Guarantee of ECGC helps
the exporter to obtain better and adequate
facilities from their bankers. The Guarantees
assure the banks that, in the event of an
exporter failing to discharge his liabilities to
the bank, ECGC would make good a major
portion of the bank's loss. The bank is
required to be co-insurer to the extent of the
remaining loss

15. Export Finance(Overseas
Lending) Guarantee
• If a bank financing an overseas project provides a foreign
currency loan to the contractor, it can protect itself from
the risk of non-payment by the contractor by obtaining
Export Finance (Overseas Lending) Guarantee
• The premium rate is 0.90% per annum for75% cover and
1.08% per annum for 90%cover. Premium is payable in
Indian Rupees

16. Insurance Cover For Buyers Credit And
Line Of Credit
• Buyers Credit is a credit extended by a bank in India to
an overseas buyer enabling him to pay for goods that he
may be importing from India.
• A Line of Credit is a credit extended by a bank in India to
an overseas bank, institution or government for the
purpose of facilitating import of a variety of listed goods
from India into the overseas country.

17. Policies & Products
Special Schemes

18. Transfer Guarantee
• The confirming bank will suffer a loss if the foreign bank
fails to reimburse it with the amount paid to the
exporter. The Transfer Guarantee seeks to safeguard
banks in India against losses arising out of such risks
• Loss due to political risks is covered upto 90% and loss
due to commercial risks upto 75%.

19. Overseas Investment Guarantee
• Any investment made by way of equity
capital or untied loan for the purpose of
setting up or expansion of overseas
projects will be eligible for cover
underinvestment insurance. The cover
would be available for the original
investment together with annual
dividends or interest receivable
• The cover can be extended for a period of
15 years from the date of completion of
the project subject to a maximum of 20
years from the date of commencement of
investment

20. Exchange Fluctuation Risk Cover
• The Exchange Fluctuation Risk Cover is intended to
provide a measure of protection to exporters of capital
goods, civil engineering contractors and consultants
who have often to receive payments over a period of
years for their exports, construction works or services.
Where such payments are to be received in foreign
currency, they are open to exchange fluctuation risk as
the forward exchange market does not provide cover for
such deferred payments.

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