The Indian government has announced it will invest INR44bn ($592m) in export underwriter ECGC Ltd over the next five years, massively boosting the country’s export capacity and creating new jobs.
The capital injection will be performed in phases between now and March 2026. According to a government press release, the funds will increase the underwriting capacity of ECGC Ltd, enabling it to cover additional exports worth INR5.28tn. That level of additional exports over the next five years will also help create nearly six million jobs in the organised and the unorganised sector.
ECGC, which was previously known as the Export Credit and Guarantee Corporation of India, has an 85% share of India’s export credit insurance market. In the year ended March 2021, ECGC’s underwrote exports worth INR6.02tn – the equivalent of 28% of India’s merchandise exports.
Debts cancelled and yet more investment
The government also said today that it has cleared pending arrears worth INR560.27bn, a move that it expects to spur economic activity and increase cash within the banking system.
Separately, the government announced an INR16.5bn investment in the National Export Insurance Account (NEIA). The finance will be released over five years, ending March 2026, and will enable companies to secure more project exports.
The funding will ultimately enable NEIA to support project exports worth up to INR330bn, translating into an estimated output of almost INR250bn of domestically manufactured goods.
India’s merchandise and services exports stood at $52.2bn in August, up 33.99% from the same month last year and 19.89% from August 2019. Total imports over the last month were $58.57bn, 45.38% up from the comparable month last year and 16% over August 2019.