Govt directs ECGC to maintain moratorium on insurance rates for exporters

SECTIONSGovt directs ECGC to maintain moratorium on insurance rates for exportersPTILast Updated: Feb 07, 2024, 04:52:00 PM ISTRate StoryFollow usShareFont SizeAbcSmallAbcMediumAbcLargeSavePrintCommentSynopsis

The government has instructed the Export Credit Guarantee Corporation (ECGC) to maintain a moratorium on insurance rates for Indian exporters in response to the Red Sea crisis. ECGC, a state-owned export promotion organization, provides credit insurance covers to improve Indian exports' competitiveness.

Agencies

The government on Wednesday said it has directed the Export Credit Guarantee Corporation (ECGC) to maintain a moratorium on insurance rates for Indian exporters in the wake of the Red Sea crisis. State-owned ECGC is an export promotion organisation, seeking to improve the competitiveness of Indian exports by providing them with credit insurance covers.

Minister of State for Commerce and Industry Anupriya Patel said that the ECGC continues to provide insurance coverage to exporters.

She said that the corporation has not refused cover for export shipments routed through the Red Sea and the credit risk cover is being provided based on the risk assessment and creditworthiness of overseas buyers and terms of payment.

"The government has directed Export Credit Guarantee Corporation Ltd. to maintain a moratorium on rates of insurance for the Indian exporters," Patel said in a written reply to the Lok Sabha.

She said that some increase in the freight cost has been reported by the industry.

Replying to a separate question, Patel said that the fruits destined for export to the US are irradiated in Indian irradiation facilities.

The United States Department of Agriculture (USDA) has approved four Indian Irradiation facilities for irradiation treatment.

As per the pre-clearance programme agreed between the two nations, the USDA inspector conducts the inspection of fruits destined for export to America in the approved facilities.

"The fruits are irradiated and inspected in India, in presence of USDA and India's Plant Quarantine Inspectors, and then are exported to USA," she said.

In another reply, she said that the government is mindful of the current geo-political situation and various IMEC partners are consulting each other on various aspects of the IMEC initiative.

On the sidelines of the G20 Leaders' Summit, India, the European Union, France, Germany, Italy, Saudi Arabia, the UAE and the US announced an MoU on September 9, 2023, committing to work together to develop a new India-Middle East- Europe Economic Corridor (IMEC).

IMEC is comprised of two separate corridors, the east corridor connecting India to the Arabian Gulf and the northern corridor connecting the Arabian Gulf to Europe.

It includes a railway route that, upon completion, will provide a reliable and cost-effective cross-border ship-to-rail transit network to supplement existing maritime and road transport routes - enabling goods and services to transit to, from, and between India, the UAE, Saudi Arabia, Jordan, Israel and Europe.

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