written by | April 15, 2022

Understanding Export Credit Guarantee Corporation of India (ECGC)

The Export Credit Guarantee Corporation of India furnishes export credit insurance to the goods supplied by exporters to their clientele. The reasons for exporters making losses in their business can be various. Some of these could be commercial, while others could also be political, among many others. This is known as ECGC insurance. This enables payment of a part of the value assured in case of any contingencies. Established by the government of India in 1957, this policy functions as an open cover for credit insurance in the larger interests of promoting Indian trade.

The ECGC Policy comes under the purview of the Commerce Ministry. It has a specific Board of individuals, which includes some Reserve Bank of Indian members, some personnel from the banking, export & insurance sectors, as well as the government. In simple words, banks furnish monetary loans to all those contractors who are involved in the execution of foreign projects. In case of the inability of contractors to honour the payments, ECGC offers protection to these banks.

Did you know?

If the customs authorities seize your goods because they are linked to smuggling, you will not be able to benefit from the insurance cover provided by ECGC.

What is the Role of Export Credit Guarantee Corporation?

In the event of any losses in the exports of goods, the exporters are protected by the ECGC policy. The policy furnishes the requisite amount of credit risk insurance to the exporters.

ECGC in export – provides specific guarantees to the various finance institutes and the banks associated with the exporters. This is done to help the exporters to enjoy more amenities.

There are several Indian enterprises that make investments in joint ventures across the globe.In such cases, the ECGC cover involves furnishing such organisations with overseas investment insurance. This is often provided by way of loans or equity.

Also Read: Place of Supply of Goods under GST

ECGC Policy and its Assistance to Exporters

The Export Credit Insurance is highly beneficial to anyone involved in exports. Given below are some of the key advantages of this insurance to exporters:

  • Insurance protection to exporters in case of non-payments provided by the export credit policy
  • A credit insurance policy eases you the worrying burden of revenue payments from your products. You can utilise that time in strategizing expansion plans for your business.
  • The ECGC policy advises and guides exporters on different aspects of their business, e.g. it helps you to make your credit timelines more flexible. This will increase your goodwill, and your exports can witness more growth as buyers welcome extended credit timelines.
  • Exporters can recover non-payments towards their exports with the help of this policy
  • It uses its credit ratings to provide important information on different countries with regard to exports and export-related activities.
  • It furnishes accurate information about the financial stability of global buyers to the exporters.
  • It facilitates the process of acquiring export finance from financial institutions and banks for exporters.

Meaning of  NIRVIK – Export Credit Insurance Scheme

NIRVIK stands for Niryat Rin Vikas. Nirmala Sitharaman, the current Finance Minister of India, launched the NIRVIK scheme in the Union Budget of 2020-2021. One of its key features is to offer more insurance cover to exporters and reduce the total amount of premium that small scale export businesses pay. It also simplifies the process of claiming settlements in a speedy manner which becomes beneficial to exporters.

What Are the Various Objectives of the NIRVIK Scheme?

The objectives of the NIRVIK scheme are as follows:

  • The scheme brings about a considerable reduction in credit costs
  • The risks of bad debts are reduced considerably with this scheme
  • Indian exports stand to become more competitive in global markets
  • Funds are made easily available to exporters under the NIRVIK scheme
  • This scheme enables exporters to enhance their business from a small scale to a large scale.
  • The scheme is aimed at boosting export productivity
  • Individuals who obtain loans will benefit from a reduction in the premium rate. This will lead to an increase in the amount of working capital. This increase will help bring about an increase in productivity.

Also Read: Time, Value & Place for Supply for Goods & Services under GST

What Are Some of the Benefits of the NIRVIK Scheme?

  • Improves the application process of loans, especially for the gems, jewellery, and diamond (GJD) sectors as well as the manufacturing sectors.
  • This scheme guarantees that the domestic rates of exchanges stay below 8% and the foreign rates of exchange stay below 4%
  • The scheme offers a credit guarantee that extends to 60% of the losses incurred
  • The NIRVIK scheme also minimises costs related to insurance and reimbursements of tax. This helps to boost productivity
  • The NIRVIK scheme ensures a 90% insurance cover on both the interest of the loan and the principal amount of the loan. In simple words, this means that if the concerned export business suffers losses, it will be able to obtain a refund of 90% of the losses it has incurred. This credit is extended prior to the shipment of goods as well as after the shipment of goods to the exporters
  • The simplified procedures will enable all micro, small as well as medium-sized commercial businesses (MSMEs) to conduct their business in a seamless manner
  • To encourage all potential Indian exporters to make an entry into global markets. This will help promote Indian trade, boost the economy as well as increase productivity and returns.
  • The NIRVIK scheme is export-friendly and removes the conventional red-tapism, which involved strict conformity to earlier rules. This will inspire and motivate Indian exporters to take a bigger leap forward in global markets
  • The NIRVIK scheme is aimed at increasing the value of Indian exports to at least ₹ 30 crores in the next few years.

Key Aspects of the NIRVIK Scheme

  • Some of the important details of the NIRVIK scheme are as follows:
  • Increased insurance cover for export firms
  • Small-sized export businesses to benefit from fewer premium payments
  • Settlements of all claims are made extremely simple and resolved speedily
  • All small-scale exporters benefit with the help of easy procedures for obtaining credit facilities.


The details of this article inform you about the Export Credit Guarantee Corporation of India, the manner in which it functions as well as the various facilities it offers to exporters. This article also provides you with in-depth information about the NIRVIK scheme and how it is aimed primarily at increasing the export capacity of India across the world. This scheme also provides numerous benefits to small-scale exporters.

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Q: What is the meaning of export credit?


Export credit involves the financial support extended by a government to its overseas purchasers who buy products from the specific government’s domestic exporters.

Q: What is the amount of credit guarantee under the NIRVIK scheme?


The amount of credit guarantee extends to 60% of the losses.

Q: What is special about the NIRVIK scheme?


The Niryat Rin Vikas Yojana (NIRVIK) scheme provides increased insurance cover to Indian exporters. This scheme simplifies the procedures of loan borrowings and reduces the premium for small-scale exporters.

Q: What is the main role of Export Credit Guarantee Corporation in India?


Its key objective is to help all potential Indian exporters to set foot into foreign territories to enhance the export capacity of India.

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