The Export Credit Guarantee Corporation of India Ltd is supporting exporters by decreasing variable costs. This has become important off late in the wake of the rupee strengthening against the greenback.
In its latest endeavour to boost exports, ECGC has tied up with National Insurance Company to offer free marine insurance cover to exporters opting for credit insurance cover.
Commenting on India's 'pathetic' share of international trade at less than 1 per cent, chairman and managing director P M A Hakeem said, "We need to take determined steps to increase our share in exports." Meanwhile, Hakeem was promoted to the rank of secretary as of yesterday.
The tie up between ECGC and National Insurance Company is of significance as it is expected to help achieve the government's objective of reaching 1 per cent share of the global trade by the year 2007," said H S Wadhwa, chairman and managing director, National Insurance Company.
Despite the fluctuation in the rupee-dollar, India has seen a 12 per cent growth in exports in dollar terms and 10 per cent in rupee terms, said S Prabhakaran, executive director, ECGC.
"We are trying to see how well we can further support India's exporters through cost reduction. By providing marine insurance as an add-on facility to exporters, this will amount to a savings of 0.07 to 0.12 per cent of charges," Prabhakaran said.
ECGC has taken various steps to push exports including upgrading a number of countries such as Pakistan, South Korea and Libya whereby the premium cost of credit insurance cover comes down.
In addition, in April 2003 ECGC revised its premium rates downward by 7 per cent to 30 per cent.
Exporters assuring ECGC of fixed annual business get a further discount on the premium by as much as 20 per cent. ECGC expects total income of Rs 650 crore (Rs 6.50 billion) in fiscal 2004, including investment income and a premium income of Rs 440 crore (Rs 4.40 billion).