Full Form of ECGC, Export Credit Guarantee Corporation of India Limited

ECGC stands for Export Credit Guarantee Corporation of India Limited. The Government of India owns 100 per cent of ECGC. The ECGC headquarter is in Mumbai, Maharashtra. The Ministry of Commerce controls ECGC, which provides insurance for export credit to Indian exporters. 

The Government of India established the Export Risks Insurance Corporation (ERIC) in July 1957 to strengthen export promotion by covering the uncertainty of exporting on credit. It is administered by the Ministry of Commerce & Industry, the Department of Commerce, and the Government of India. It was later named Export Credit and Guarantee Corporation Limited (ECGC) in 1964, and Export Credit Guarantee Corporation of India in 1983.

The ECGC offers a variety of credit risk insurance coverage to exporters against loss during the export of goods and services, as well as assurances to banks and financial institutions to allow them to gain better amenities from them. In addition, the Export Credit Guarantee Corporation of India Limited offers overseas investment insurance to Indian companies that invest in joint ventures abroad in the form of equity, loan, or advances.

History of ECGC

ECGC Ltd. was founded in July 1957 to promote exports by covering the risk of exporting on credit. The Ministry of Commerce and Industry administers it, Department of Commerce, Government of India. It is managed by an Asset Management Company comprised of the government, Reserve Bank of India, banking, insurance, and exporting community representatives.

According to a certificate issued by the Deputy Registrar of Companies, Registrar of Companies, Mumbai, the company's name has been changed from Export Credit Guarantee Corporation of India Limited to ECGC Limited with effect from August 8, 2014.

Regarding the coverage of national exports, ECGC Ltd. is the world's seventh-largest credit insurer. The company's current paid-up capital is 3,190 crores, and its authorized capital is 5,000 crores.

Functions of ECGC

The ECGC performs the following functions for the Indian exporters' community:

1. Offering a wide range of credit risk insurance coverage to exporters in the event of a loss in the export of goods and services.
2. Offering export credit insurance to banks and financial institutions for exporters to obtain better terms from them.
3. Offering overseas investment insurance to Indian companies that invest in overseas joint ventures through loans or equity.

How does the ECGC assist exporters?

The ECGC protects Indian exporters against payment risks through insurance. It benefits exporters in a variety of ways, including:

• In charge of export-related activities
• Making information about various countries' credit ratings available.
• Making it simple to obtain export financing from banks and other financial institutions
• Assisting Indian exporters in recovering bad debts
• Providing information on foreign buyers' creditworthiness, ECGC also protects exporters' credit risks against political and commercial conditions and guarantees payment to exporters.

ECGC provides several types of insurance coverage, which can be classified as follows:

• Standard policies to protect Indian exporters from foreign credit risks
• Policies on construction and services
• Financial Security

Unique policies The ECGC provides the following types of guarantees to exporters:

• Guarantee for export financing
• Packing credit assurance
• Guarantee of post-shipment export credit
• Guarantee of export production financing
• Guarantee of transfer
• Export performance assurance

The Export Credit Guarantee Corporation of India has proven beneficial to Indian exporters over the years. It reimburses Indian exporters for 80-90 percent of their losses. The exporters must bear the remaining 10 to 20% of the loss.

However, it does not cover the following risks:

• Exchange rate fluctuations result in exchange loss.
• Failure of the foreign buyer to obtain import authorization or exchange
• The exporter's or his agent's default
• Any loss incurred as a result of a quality dispute Risk inherent like goods

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