ECGC (ECGC Limited) is a Government of India enterprise that provides export credit insurance and related support to Indian exporters. It helps protect exporters and lending institutions against certain risks that can prevent or delay payment for exported goods and services.
ECGC covers eligible commercial and political risks, depending on the policy. Its support can also help exporters obtain better access to bank finance because insured export receivables can reduce the lender’s risk.
How It Works:
- Exporters apply for an ECGC policy.
- ECGC assesses the applicable risks.
- Exporters ship goods or provide services.
- The buyer makes payment as agreed.
- ECGC provides coverage if a covered loss occurs.
Benefits:
- Protects against certain export payment risks
- Helps exporters manage overseas buyer risk
- Supports access to export finance
- Encourages businesses to explore international markets
Example:
An Indian exporter sells goods to a buyer overseas on credit. If the buyer fails to pay due to a covered commercial or political risk, ECGC may compensate the exporter according to the policy terms.