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Under the scheme, also called the Export Credit Insurance Scheme, the insurance guaranteed could cover up to 90 per cent of the principal and interest.
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.
The scheme is being prepared by the commerce ministry.
Under the scheme, also called the Export Credit Insurance Scheme (ECIS), the insurance guaranteed could cover up to 90 per cent of the principal and interest.
The ministry has also proposed to subsidise the premium under the scheme that has to be paid by exporters of certain key sectors.
The Export Credit Guarantee Corporation currently provides credit guarantee of up to 60 per cent loss.
The development assumes significance as exporters have raised concerns over availability of credit.
The country's exports contracted for a fifth month in a row by 1.8 per cent in December 2019 to $27.36 billion.
During April-December 2019-20, exports slipped 1.96 per cent to $239.29 billion, imports declined 8.9 per cent to $357.39 billion, leaving a trade deficit of $118.10 billion.
Photograph: Aly Song/Reuters