NEW DELHI: As payment defaults increased in the US and Europe, exporters rushed to the Export Credit Guarantee Corporation of India (ECGC) which saw 60 per cent rise in the insurance claims last fiscal.
“Insurance claims by exporters have increased by about 60 per cent during 2008-09. We have defaults in the US, UK, Germany...These nations have contributed significantly (to the claims),” ECGC General Manager Mr V Viswanathan told said here on Friday.
ECGC cleared claims worth Rs 180 crore up to March 12, 2009, in the previous fiscal under the export credit policy as against Rs 119 crore in 2007-08. Of these, claims relating to the shipments to the US alone were estimated to have gone up nearly three times to Rs 101 crore compared with Rs 35 crore in the corresponding period last year.
The textile sector, the worst hit by recession in the US and several parts of Europe, claimed 50 per cent of the total number of ECGC claims. While the default claims have risen for the state-owned company in the export sector, the total liability of ECG C has increased to Rs 450 crore in 2008-09 from Rs 420 crore in the previous fiscal.
Export credit policy covers risk arising from commercial environment. Exporters buy risk covers to safeguard their payments against the default by buyers.
Source : Business Line