ECGC, a premier Export Credit Agency (ECA) of Government of India (GOI) established in 1957, provides credit insurance covers to exporters against non-payment risks by the overseas buyers due to commercial and political reasons. It also provides insurance covers to banks against risks in export credit lending to the exporter borrowers. ECGC endeavours to support the Indian export industry with its experience, expertise and underlying commitment to progress and advance of India’s exports. ECGC promotes both Short Term (ST) exports (i.e. export realization within one year) and Medium and Long Term (MLT) exports (i.e. export realization extending over a period of more than one year). In all, there are 19 insurance products for exporters, 11 insurance products for banks and 12 insurance products for medium and long-term exporters/banks. Further, ECGC also provides customized covers to meet specific requests of exporters. It has also introduced the factoring facility to the MSME sector and cover in foreign currency to Special Economic Zone exporters. Risks CoveredThe commercial risks covered are insolvency of the buyer, protracted default by the buyer to pay for the goods and the failure of the buyer to accept goods subject to certain conditions. The coverage also includes default and insolvency of overseas banks that open L/C as well as losses arising on account of non-payment due to discrepancies which do not materially alter the terms, subject to certain conditions.The political risks covered are imposition of restriction on remittances by the government in the buyer’s country or any government action which may block or delay payment to the exporter, war, revolution or civil disturbance in the buyer’s country, new import licensing restrictions or cancellation of a valid import license in the buyer’s country after dispatch of goods by the exporter, cancellation of export license or imposition of new export licensing restrictions in India after the effective date of contract (under Contracts Policy) and payment of additional handling, transport or insurance charges occasioned by interruption or diversion of voyage which cannot be recovered from the buyer. Some of the major policies for short term covers are as follows:Shipments (Comprehensive Risks) Policy: For Exporters whose anticipated annual export turnover is more than `500 lakhs will be eligible for this policy. This is a standard whole-turnover policy wherein all shipments are required to be covered under the Policy.Exports (Turnover) Policy: Turnover policy is for the benefit of large exporters who contribute not less than `20 lakhs per annum towards premium. The policy envisages projection of the export turnover of the policyholder for a year and the initial determination of the premium payable on that basis, subject to adjustment at the end of the year based on actual. This is a standard whole turnover policy wherein all shipments are required to be covered under the policy.Single Buyer Exposure Policy: This policy is provided to insure exporters having a large number of shipments to a particular buyer with simplified procedure and rationalised premium. An exporter can choose to obtain exposure-based cover on a selected buyer. The cover would be against commercial and political risks. The option to exclude L/C shipment is available.Multi-Buyer Exposure Policy: This policy is suitable for exporters who export to a large number of buyers and the number of shipments made by them is quite high. If the transaction is on L/C terms, failure of the L/C opening bank in respect of exports against L/C will also be covered.Small Exporters Policy: Exporters whose anticipated annual export turnover for a period of one year does not exceed `500 lakhs are eligible for this policy. This is a standard whole turnover declaration-based policy wherein all shipments are required to be covered under the Policy.ECGC’s Export Factoring Facility: Under this policy, ECGC will enter into an agreement with the exporter to purchase the export receivables without recourse and assume credit risks on the overseas buyer. If the buyer defaults, the payment for undisputed liability will be made by ECGC. This is designed for exporters who fall under the category of MSME as per MSMED Act 2006 and have minimum three years’ experience in exports with a good track record.