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Annual Report 2011-12
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Exim Bank Launches New Product To Boost Project Exports From India
Union minister for Commerce and Industry Mr Anand Sharma (fourth from left) launched Buyer's Credit under Government of India's National Export Insurance Account (NEIA) in New Delhi on April 6, 2011 in the presence of senior officials of Exim Bank and ECGC. Seen in the picture are (from left) Exim Bank executive director Mr Prabhakar Dalal, Exim Bank chairman and managing director Mr T.C.A. Ranganathan, Indian foreign secretary Ms Nirupama Rao, ECGC chairman and managing director Mr Arvind Mehta and ECGC executive director Ms Geetha Muralidhar.
India's Commerce & Industry Minister Shri Anand Sharma launched a new product called 'Buyer's Credit under the NEIA' at a seminar held on April 6, 2011, in New Delhi, to promote project exports from India. Export-Import Bank of India (Exim Bank) in conjunction with the Export Credit Guarantee Corporation of India Ltd (ECGC) has developed the new product --- Buyer's Credit under Government of India's National Export Insurance Account (NEIA) --- to give an impetus to project exports from India.
Sovereign governments and government-owned entities overseas can use the Buyer's Credit facility for financing import of projects from India on deferred payment terms.
While launching Buyer's Credit under NEIA, Mr Sharma said, "Currently, not many project exporters are venturing out in overseas markets. In fact, the number of project exporters is dwindling. There is vast scope for diversification of markets for project exports from India and for enhancing project export business into the existing market. Developing countries are the major markets for India's project exports, and these countries demand medium to long-term credits. With the introduction of this new product, I am sure, many project exporters would be in a position to venture into new markets, and help diversify India's Project exports."
Indian Foreign Secretary Ms Nirupama Rao congratulated both Exim Bank and ECGC for developing the product which, she said, would surely help companies from India engaged in project exports.
Speaking at the seminar, Exim Bank chairman and managing director, Mr T.C.A. Ranganathan said, "The product with its attractive feature of extending credit directly to overseas buyers of projects from India without recourse to Indian exporters, will lead to a substantial rise in exports from India. Credit period would normally be 5 to 8 years, however, longer credit period could be considered in deserving cases."
Explaining the features of the product, ECGC chairman and managing director Mr Arvind Mehta said, "While Exim Bank will extend the credit facility, it will obtain credit insurance cover under NEIA through ECGC and the insurance premium will be borne by the project exporter."
About Exim Bank: Exim Bank, a statutory apex financial institution was set up in 1982 under an Act of Parliament to finance, facilitate and promote India's international trade. It is the principal financial institution in the country for coordinating the working of institutions engaged in financing exports and imports. In addition to its Head Office in Mumbai, Exim Bank has ten other domestic representative offices and seven overseas offices. Exim Bank provides competitive finance at various stages of the export business cycle covering import of technology, export product development, export production, export marketing and export credit at pre-shipment and post-shipment stages and investments overseas. In addition to finance, Exim Bank provides a range of analytical information and export related services necessary for globalisation of Indian companies.
About ECGC: Export Credit Guarantee Corporation of India Limited, was established in the year 1957 by the Government of India to strengthen the export promotion drive by covering the risk of exporting on credit. Being essentially an export promotion organization, it functions under the administrative control of the Ministry of Commerce & Industry, Department of Commerce, Government of India. It is managed by a Board of Directors comprising representatives of the Government, Reserve Bank of India, banking, insurance and exporting community. ECGC is the fifth largest credit insurer of the world in terms of coverage of national exports. The present paid-up capital of the company is Rs 800 crores and authorized capital Rs 1000 crores.
About NEIA: National Export Insurance Account is a Trust set up by Ministry of Commerce and Industry, Government of India, for providing export credit insurance cover for promoting project exports from India, administered by ECGC. NEIA has a corpus of Rs 2000 crores. The objective of the Fund is to promote project exports from India, which will not take place but for the support of a credit insurance cover in the following cases - viz., high risk on a single country; high value of single transaction; large valued projects involving unusual or unconventional credit terms, which are beyond the normal risk bearing capacity of ECGC.
For further information, please contact
Ms. Daya Chandrahas,
Export-Import Bank of India,
Centre One Building, Floor 21,
World Trade Centre Complex, Cuffe Parade,
Mumbai 400 005.