Export Credit Guarantee Corporation of India (ECGC) – An Overview

ECGC - Export Credit Guarantee Corporation of India

What is ECGC?

Export Credit Guarantee Corporation of India, also known as ECGC, was established in 1957 with the objective of promoting and supporting Indian exports by providing Export Credit Insurance and related services. The organisation functions under the administrative control of Ministry of Commerce & Industry, and is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, Banking, and Insurance and exporting community.

The primary function of ECGC is to safeguard exporters against the risk of non-payment by overseas buyers. It achieves this through Export Credit Insurance, which provides coverage for both commercial and political risks associated with export transactions.

ECGC – Background and History

The need for Export promotion was felt immediately after Independence in 1947. The Ministry of Commerce and Industry analysed the pros and cons of Export Credit Insurance Scheme. On 30th July 1957, the Export Risk Insurance Corporation (ERIC) was set up as a Private Limited Company under the Companies Act with an authorised capital of Rs5 Crores and a paid-up capital of Rs25 Lakhs.

After the introduction of export credit insurance covers, ERIC’s name was changed to Export Credit & Guarantee Corporation Ltd. In 1964. The above name was changed to Export Credit Guarantee Corporation of India Ltd. in the year 1983 and in August 2014, it was renamed as ECGC Ltd.

Over the decades, ECGC has introduced various Export Credit Insurance Products and schemes to meet the evolving needs of Indian exporters and commercial banks financing exports. It helps exporters manage risks like buyer default or payment delays, facilitates trade finance from banks, and provides credit information on overseas buyers. By providing export credit risk covers, ECGC has played a significant role in promoting and supporting India’s exports for over 60 years.

Why Do We Need Export Credit Insurance in International Trade?

An Export Credit Insurance Policy is important for the following reasons:

  1. It protects exporters from the risk of non-payment: Export Credit Insurance covers the exporter if a foreign buyer fails to pay for goods or services. An Exporter exporting goods or services is exposed to a significant risk of non-payment. Additionally, it is difficult to avail justice in a foreign land when the exporter is not aware of the legal framework. These risks have increased manifold with an increase in geopolitical and economic risks. An Export Credit Insurance Policy protects an exporter from such risks by insuring his overseas receivables.
  2. It makes exporting more accessible: Credit Insurance helps smaller exporters manage the risks and cash flow issues associated with exporting. Since their receivables are insured with a Credit Insurance Policy, the capital does not get locked up in bad debt. This makes Exports very accessible for small entrepreneurs.
  3. It encourages exporters to offer credit – Exporters can extend credit terms to foreign buyers, knowing they are protected by their Insurance Policy if the buyer defaults. This allows the exporter to increase sales.

What does ECGC do? – Services and Products of ECGC

Export Credit Insurance Policies

ECGC’s Export Credit Insurance Policy protects exporters against the risk of non-payment by overseas buyers. The Policy covers both commercial risks like bankruptcy of the buyer as well as political risks like war and civil unrest in the buyer’s country. The Insurance Policies provide coverage up to 90% of the Invoice Value and Premiums typically range from 0.5% to 1.5% based on the destination country risk and percentage of cover

Export Credit Insurance for Banks and Financial Institutions

ECGC also provides Export Credit Insurance for Banks and Financial Institutions involved in financing export transactions. Banks can avail pre and post shipment guarantees from ECGC to cover the risks when extending credit facilities like export bill discounting, packing credit, and term loans to exporters. These guarantees cover up to 75-90% of the credit amount and protect the bank from default by the exporter.

Special Schemes and Policies

ECGC offers a variety of special insurance schemes and policies tailored to the specific needs of different exporter segments such as Buyer’s Credit Cover, Line of Credit Cover and Overseas Investment Insurance Cover to protect Indian Investment abroad from Political Risk.

Key Benefits and Importance of ECGC’s Export Credit Insurance

1.      Risk Mitigation and Protection Against Non-Payment

Export Credit Insurance covers both commercial and political risks, providing protection against losses due to non-payment by overseas buyers. This safeguards the exporter against risks associated with non-payment by overseas customers.

2.      Enhanced Creditworthiness and Access to Financing

Credit Insurance improves exporters’ credit profile, enabling them to get better access to finance from banks and institutions at optimal rates. Banks also feel assured of extending credit as their receivables are protected with an Insurance Policy.

3.      Expansion of business into New Territories and to New Customers

Export Credit Insurance Cover allows exporters to explore new markets and buyers, backed by Insurance Cover. ECGC also provides market intelligence to identify creditworthiness of overseas buyers. This allows Indian exporters to take informed decisions.


ECGC plays an important role in supporting and boosting Indian exports by enabling exporters to mitigate risks and access finance, allowing them to be competitive. It also provides crucial payment security to exporters, encouraging them to explore new markets.

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