What does ECGC do?

• In case of loss of export of goods and services, it provides credit risk

insurance covers to exporters
• Export Credit Insurance covers are offered to banks and financial
institutions to enable exporters to obtain better facilities from them.
• It assists exporters in recovering bad debts.
• It provides information regarding different countries with its own credit
ratings
• For Indian companies investing in joint ventures abroad in the form of
equity or loan, Overseas Investment Insurance is provided.
• It offers insurance protection to exporters in the case of any payment
risks.
• It provides guidance to activities related to export.
• It Provides information regarding creditworthiness of overseas buyers

COVERS ISSUED BY ECGC:

The covers issued by ECGC can be divided broadly into four groups:
1. STANDARD POLICIES — issued to exporters to protect them against payment risks
involved in exports on short-term credit.

Cover 2 risks
1. Commercial Risks

• Insolvency of the buyer

• Buyer’s protracted default to pay for goods accepted by him
• Buyer’s failure to accept goods subject to certain conditions
2. Political risks

• Imposition of restrictions on remittances by the government in the buyer’s country or any

government action which may block or delay payment to exporter.
• War, revolution or civil disturbances in the buyer’s country. Cancellation of a valid import
license or new import licensing restrictions in the buyer’s country after the date of
shipment or contract, as applicable.
 2. SPECIFIC POLICIES — designed to protect Indian firms against payment risk involved in (i)
exports on deferred terms of payment (ii) service rendered to foreign parties, and (iii)
construction works and turnkey projects undertaken abroad.

1) Specific policy for Supply Contracts:

Specific policy for Supply contracts is issued in case of export of Capital goods sold on deferred
credit.
2) Service policy:

Indian firms provide a wide range of services like technical or professional services, hiring or
leasing to foreign parties (private or government). Where Indian firms render such services they
would be exposed to payment risks similar to those involved in export of goods. Such risks are
covered by ECGC under this policy.

3) Construction Works Policy:

This policy covers civil construction jobs as well as turnkey projects involving supplies and
services. This policy covers construction contracts both with private and foreign government.

3. FINANCIAL GUARANTEES — issued to banks in India to protect them from risk of loss
involved in their extending financial support to exporters at pre-shipment and post-
shipment stages; and

(i). Packing Credit Guarantee

(ii). Export Production Finance Guarantee

(iii). Export Finance Guarantee
(iv). Post Shipment Export Credit Guarantee
(v). Export Performance Guarantee

(vi). Export Finance (Overseas Lending) Guarantee.

4. SPECIAL SCHEMES such as Transfer Guarantee meant to protect banks which add
confirmation to letters of credit opened by foreign banks, Insurance cover for Buyer’s
credit, etc.