ns ran e in ndia 13.5
(when a financial help comes in from the within such projects are covered and underwritten on
the bank/financial institution). Though such government account6 .
apprehensions were cancelled by the Government.
Presently, Rs. 1 lakh of depositors are protected/ nationaL export insurance
insured by the DICGC—the limit remained
unchanged since 1993. Many countries revised
their deposit insurance limits after the global For facilitating the service of the ECGC (discussed
financial crisis of 2008—upto US$ 2.5 lakh above), the Government of India did set up the
in USA and US$ 1.15 lakh in UK (set around National Export Insurance Account (NEIA) in
3-4 times of the per capita income of these March 2006 to promote medium- and long-term
economies). Emerging economies like Brazil and
export by providing credit insurance support in the
China have set this limit at nine times of their per
cases where ECGC was not able to provide credit
capita income. In case of India it is still a little over
its per capita income (which was estimated to be cover on its own because of purely commercial
Rs.1,11,782 at constant market price, as per the reasons:7
Economic Survey 2017-18 ). (i) The corpus given to the account was Rs.
66 crore, raised to Rs. 246 crore by 2007–
export creDit Guarantee 08 and was enhanced to Rs. 2,000 crore
corporation (ecGc) in the Eleventh Plan (2007–12).
The overseas projects undertaken by the Indian (ii) Resources of the NEIA will be the corpus,
companies face many political and commercial the premium income, interest income
risks in the importing countries. To provide and recovery of all the claims paid.
adequate credit insurance cover to such firms, (iii) As per the provision, an exposure equal
the government has set up the Export Credit to ten times corpus can be taken by the
Guarantee Corporation of India Ltd. (ECGC) NEIA.
under the Ministry of Commerce and Industry,
The NEIA can cover projects which fulfil the
for medium- and long-term exports. But owing to
its own limitations, at times it is difficult for ECGC
to cover pure commercial risks in issues like long (i) The project by itself should be
repayment period, the large value of contracts, commercially viable;
difficult economic and political conditions of the (ii) The project should be strategically
importing country, together with the fact that important for India, with regard to
reinsurance cover is generally not available for economic and political relationship of
such projects.5 Many times such projects look India with the importing country; and
necessary considering the economic and political
relationship of India with the proposed importing 6. As for example the USA, France, the UK and many
other Euro-American economies underwrite such
country. It means that in the absence of credit
medium and long-term projects in the governments’
insurance cover, the ability of Indian exporters to account. The SEIA also covers only medium- and
go for such export projects is hampered. It should long-term export projects.
be noted that in many developed economies 7. Announced while setting up the NEIA, Ministry of
Commerce and Industry, Government of India, N. Delhi,
5. Due to its underwriting constraint, the ECGC is unable 9 March, 2006.
to cover such projects on its own. 8. Ibid.