Ministry of Commerce & Industry throughExport Credit Guarantee Corporation (ECGC) has introduced a new Export Credit Insurance Scheme (ECIS) called NIRVIK to enhance loan availability and ease the lending process.
NIRVIK scheme to provide high insurance cover for exporters: FM
The details of the scheme were shared by the Commerce & Industry and Railways Minister, Piyush Goyal and Minister of State for Commerce & Industry,Hardeep Singh Puri, in a press conference in New Delhi today.
The scheme was announced by the Finance Minister Nirmala Sitharaman to boost exports on 14th September 2019 in New Delhi.
Piyush Goyalsaid that the gems, jewellery and diamond(GJD) sector borrowers with limit of more than Rs. 80 crore will have a higher premium rate as compared to non-GJD sector borrowers of this category due to the higher loss ratio. The ECGC cover provides additional comfort to banks as the credit rating of the borrower is enhanced to AA rated account.
Enhanced cover will ensure that Foreign and Rupee export credit interest rates will be below 4%and 8% respectively for exporters.
Under ECIS, insurance coverpercentage has also been enhanced to 90% from the present average of 60% for bothPrincipal and Interest.
Commerce Secretary, AnupWadhawan, Director General of Foreign Trade, AlokVardhanChaturvedi, ECGC Chairperson and Managing Director, GeethaMuralidharand heads of several banks were present during the press conference.
The government’s proposed scheme to provide enhanced insurance cover and reduce premium for small exporters is timely amid India’s slowing exports, industry said.
Finance Minister Nirmala Sitharaman on Saturday announced NIRVIK (Niryat Rin Vikas Yojana) scheme to provide enhanced insurance cover and reduce premium for small exporters.
“To achieve higher export credit disbursement, a new scheme NIRVIK is being launched which provides for high insurance cover, reduction in premium for small exporters and simplified procedures for claim settlements,” she said while presenting Budget 2020-21 here.
The commerce and industry ministry is working on the scheme also called the Export Credit Insurance Scheme (ECIS) under which the insurance guaranteed could cover up to 90% of the principal and interest. At present, the Export Credit Guarantee Corporation provides credit guarantee of up to 60% loss.
“This is most timely as during the period of uncertainty and slow down, higher default in payments are likely to increase,” said Ajay Sahai, director general, Federation of Indian Export Organisations, adding that it will immensely help the small exporters by increasing the insurance cover given to banks and reducing the premium for exporters.
The scheme comes at a time when India’s exports declined for the fifth month in a row at 1.8% in December to $27.36 billion as 19 of the 30 exporting sectors showed a decline in outbound shipment.
This scheme for remission of duties and taxes on “exported products will be launched from this year itself,” she said.
The move comes in the wake of Merchandise Export from India scheme found violating global trade norms.
Under the World Trade Organisation (WTO) rules, certain duties like state taxes on power, oil, water, and education cess are allowed to be refunded).
She also said that to develop each district as an export hub, “efforts of the centre and state governments are being synergised and institutional mechanisms are being created in order that every district becomes an export hub”.
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MM/SB (Release ID: 1585226) Visitor Counter : 3231 and https://economictimes.indiatimes.com/
NIRVIK scheme to provide high insurance cover for exporters: FM
The details of the scheme were shared by the Commerce & Industry and Railways Minister, Piyush Goyal and Minister of State for Commerce & Industry,Hardeep Singh Puri, in a press conference in New Delhi today.
The scheme was announced by the Finance Minister Nirmala Sitharaman to boost exports on 14th September 2019 in New Delhi.
Piyush Goyalsaid that the gems, jewellery and diamond(GJD) sector borrowers with limit of more than Rs. 80 crore will have a higher premium rate as compared to non-GJD sector borrowers of this category due to the higher loss ratio. The ECGC cover provides additional comfort to banks as the credit rating of the borrower is enhanced to AA rated account.
Enhanced cover will ensure that Foreign and Rupee export credit interest rates will be below 4%and 8% respectively for exporters.
Under ECIS, insurance coverpercentage has also been enhanced to 90% from the present average of 60% for bothPrincipal and Interest.
Commerce Secretary, AnupWadhawan, Director General of Foreign Trade, AlokVardhanChaturvedi, ECGC Chairperson and Managing Director, GeethaMuralidharand heads of several banks were present during the press conference.The government’s proposed scheme to provide enhanced insurance cover and reduce premium for small exporters is timely amid India’s slowing exports, industry said.
Finance Minister Nirmala Sitharaman on Saturday announced NIRVIK (Niryat Rin Vikas Yojana) scheme to provide enhanced insurance cover and reduce premium for small exporters.
“To achieve higher export credit disbursement, a new scheme NIRVIK is being launched which provides for high insurance cover, reduction in premium for small exporters and simplified procedures for claim settlements,” she said while presenting Budget 2020-21 here.
The commerce and industry ministry is working on the scheme also called the Export Credit Insurance Scheme (ECIS) under which the insurance guaranteed could cover up to 90% of the principal and interest. At present, the Export Credit Guarantee Corporation provides credit guarantee of up to 60% loss.“This is most timely as during the period of uncertainty and slow down, higher default in payments are likely to increase,” said Ajay Sahai, director general, Federation of Indian Export Organisations, adding that it will immensely help the small exporters by increasing the insurance cover given to banks and reducing the premium for exporters.
The scheme comes at a time when India’s exports declined for the fifth month in a row at 1.8% in December to $27.36 billion as 19 of the 30 exporting sectors showed a decline in outbound shipment.
This scheme for remission of duties and taxes on “exported products will be launched from this year itself,” she said.
The move comes in the wake of Merchandise Export from India scheme found violating global trade norms.Under the World Trade Organisation (WTO) rules, certain duties like state taxes on power, oil, water, and education cess are allowed to be refunded).
She also said that to develop each district as an export hub, “efforts of the centre and state governments are being synergised and institutional mechanisms are being created in order that every district becomes an export hub”.
***
MM/SB (Release ID: 1585226) Visitor Counter : 3231 and https://economictimes.indiatimes.com/
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