Most countries strive to increase their exports. The more they export, the higher their competitive advantage. They gain expertise in producing goods and services.
Trends and buying preferences gives the exporter ideas for improvement and innovations. Government encourage exports. It increases jobs, brings in higher wages and raises the standard of living. It also increases the foreign exchange reserves held in the country.
Role of ECGC in India’s Export Promotion
ECGC is a premier Export Credit Agency (ECA) of the Government of India, to provide export credit insurance services to the exporters and banks on a no-loss/no-profit basis. The vision of ECGC is to excel in providing export credit insurance and trade-related services. The mission of ECGC is to support the Indian export industry by giving cost-effective protection and trade-related services.
ECGC provides credit insurance covers to exporters and to banks to augment/ensure flow of adequate bank credit to exporters at both pre-shipment and post-shipment stages. This addresses the credit insurance requirements of exports made under short term (ST) as well as medium & long term (MLT) basis.
Today, ECGC’s business has expanded to coverage of around Rs.265,000 crore with over 35,000 covers issued to exporters and various banks. Claim settlements has touched Rs.6900 crore in the last decade. The share of banks covered by ECGC in export lending is almost 65 per cent of the total export credit disbursed in the country. Over 20,000 distinct exporters are being supported by ECGC through its various covers.
India is presently one of the most critical players in the global economic landscape. Its trade policies, government reforms and inherent economic strengths have attributed to its standing as one of the most sought-after destinations for foreign investments in the world. Also, technological and infrastructural developments being carried out throughout the country augur well for the trade and economic sector in the years to come.
As per the latest HSBC Global report, India has the potential to become the world’s fifth-largest exporter of goods by 2030 from its present 14th position. India’s services exports will more than triple by 2030, taking its share in world services exports to 4 per cent. India’s current share is 3.27 per cent. Services exports, the report says, will grow at 8-9 per cent a year for the next 15 years.
The growth is possible due to improved investor confidence, lower food prices and better policy reforms. Initiatives like Make in India, Startup India and Digital India will play a vital role in driving the Indian economy. The government of India is striking essential deals with various foreign governments; the external sector is increasing its contribution to the economic development of the country and growth in the global markets.
ECGC, is committed to supporting the growth, by improved products, investment in new IT system for better process, tie-up with various agencies abroad to obtain better information on buyers and increasing recovery capacity. The systemic role of ECGC in enabling adequate export credit and catalytic role in facilitating credit risk mitigation in ventures into new markets will be crucial in supporting the projected growth.
Companies should exploit this opportunity and harvest the growth potential. ECGC is poised to play the perfect partner role with cost-effective world-class credit insurance services.