Export Credit Guarantee Corporation of India (ECGC), which provides insurance cover to exporters, said insurance claims in the fiscal year ending March 2009 increased by 60 per cent over the previous year because of payment default by buyers.
The textile sector, hit worst by the economic crisis gripping the US and European markets, accounted for nearly half the total claims, V Vishwanathan, general manager of ECGC, said at a meeting organised by the PHD Chamber of Commerce.
In fiscal 2008-09, ECGC cleared claims worth Rs 180 crore for period up to March 12, 2009, as compared with Rs 119 crore in fiscal ended March 2008.
Of these, claims relating to shipments to the US alone are estimated to have gone up nearly three times to Rs 101 crore, compared with Rs 35 crore in the corresponding period last year.
With deepening of the current global economic crisis, many developed economies like the US and Europe, which account for nearly 30 per cent of India’s exports, are experiencing shrinking of demand. Many firms have declared bankruptcy and are shutting operations. These factors have led to an increase in insurance claims by Indian exporters.
ECGC is the fifth-largest credit insurer in the world in terms of coverage of national exports. Under the MSME (micro, small, medium enterprises) policy, covering exporters with a turnover of 10 lakh, an additional protection of 5 per cent has been made available. This increases the maximum cover to 95 per cent.
The exporters present at the workshop demanded more assistance from the government in the form of availability of easy credit lines and insurance against currency fluctuations.
