Union Cabinet Approves Rs. 4,400 Crore Investment In ECGC For 5 Years

Today, on September 29, the Union Cabinet has approved an Rs. 4,400 crore investment in the Export Credit Guarantee Corporation Ltd. (ECGC) for the next 5 years, from FY 22 to FY 26 for providing support to the exporters and the banks. ECGC provides insurances to the banks against risks in export credit lending to the exporter-borrowers. Piyush Goyal, the Minister of Commerce said, the Cabinet has also cleared a proposal to list the ECGC through the Initial Public Offer (IPO) on the stock exchange. This will increase ECGC's underwriting capacity by around Rs. 88,000 crore and will also help in additional exports of Rs. 5.28 lakh crore in the upcoming 5 years.

The government in an official statement said, "Listing may enable ECGC to mobilize fresh capital from the market either through the same IPO or subsequently through a Follow-on Public Offer (FPO) and thereby help in increasing the maximum cover for it."

ECGC has been giving profits largely for last and the corporation also pays dividends regularly. According to Goyal, around 97% of the industries are from MSME sectors, and today's decision will provide direct benefit to MSMEs as they'll be able to export on a bigger scale. Rs. 500 crore will be disbursed immediately, and Rs. 500 crore more will be disbursed in the next year.

ECGC was established by the union government for promoting exports by providing credit insurance to the Indian exporters against non-payment risks by the foreign buyers. The corporation is a market leader as they obtain around 85% market share in export credit insurance in the domestic market. Now, ECGC is anticipating an increase of its Maximum Liabilities (ML) to Rs. 2.03 lakh crore from Rs. 1.00 lakh crore within 2025-26. These moves are expected to boost India's export segment. The steps taken by the union government will help to create new 59 lakh jobs, including 2.6 lakh jobs in the formal sector. In addition to that, the Union Cabinet today has also approved an infusion of Rs. 1,650 crore in the National Export Insurance Account scheme.

Goyal today confirmed that till September 21, this year, India has exported goods worth $185 billion, it is the country's domestic history in the first six months.