What is the Export Credit Guarantee Corporation?

Export Credit Guarantee Corporation of India is fundamentally an export promotion organization, which seeks to enhance the competitiveness of Indian exports by offering them credit insurance covers. Over the years ECGC has considered various export credit risk insurance products suiting the needs of Indian exporters.





This corporation was set up for ensuring the smooth functioning of Indian exporters by minimizing the risks associated with the payments emanating from other nations. This insurance cover is provided by ECGC also assists the Indian exporters with better access to the credit facilities from banks and other financial institutions. ECGC is the 5th largest credit insurance company dealing with the exports of any country.


Export Credit Guarantee Corporation of India offers protection against the non-payment by an importer. Due to this insurance cover, the financial institutions are better placed for lending and providing larger credit to exporters. ECGC also offers credit ratings as well as shares the information on various countries and risks associated with doing business with/in those countries.


What does an ECGC do?

1. It offers an array of credit risk insurance covers to the Indian exporters against the loss with respect to the export of their goods and services.

2. It provides Export Credit insurance covers the banks and other financial institutions for enabling exporters to find better services from them.

3. It offers Overseas Investment Insurance to the Indian companies investing in Joint Ventures (JVs) abroad in the form of loan or equity


How does ECGC help the exporters?

ECGC provides insurance protection to Indian exporters against the payment risks. It helps the exporters in a number of ways which include:

1. Guiding export-related activities

2. Making information available with respect to various countries with its credit ratings

3. Making it easy to get export finance from the banks and other financial institutions

4. Helping Indian exporters recover bad debts

5. Providing information on the credit-worthiness of foreign buyers

ECGC further ensures exporter’s credit risks against both political as well as commercial conditions and guarantees the payment to exporters. ECGC offers several types of insurance covers and these could be classified into the following groups:


a. Standard policies that protect Indian exporters against overseas credit risks

b. Construction works and services policies

c. Financial Guarantees

d. Special policies


ECGC offers following types of guarantees to the exporters:

i. Export finance guarantee

ii. Packing credit guarantee

iii. Post-shipment export credit guarantee

iv. Export production finance guarantee

v. Transfer guarantee

vi. Export performance guarantee


Over the years the Export Credit Guarantee Corporation of India has proved to be useful to Indian exporters. It pays 80 to 90 percent of the loss incurred by Indian exporters. The remaining 10 to 20 percent of the loss alone has to be borne by the exporters.

However, it doesn’t cover the risks mentioned below:

i. Exchange loss due to fluctuations in exchange rates

ii. Failure on the part of the buyer abroad to obtain the import authorization or exchange

iii. A default of the exporter or his agent

iv. Any loss which arises due to dispute in quality

v. Risk which is inherent in the nature of goods



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