What is ECGC and how does ECGC protect exporters?

 

The information provided here is part of Export import business Course online

 

What is ECGC and how do ECGC protect exporters?

I have been getting many enquiries about the risk coverage on nonpayment of export proceeds by buyer like How to provide credit to the overseas buyer? Is credit extending to importer safe? How can an exporter provide credit to an un known buyer? What is the remedy to provide credit to an overseas importer? Is there What is ECGC and how does ECGC protect exporters copyany insurance to cover the risk of nonpayment of export goods value? Is there any insurance to protect the exporter in nonpayment of exported amount Etc.etc.

Export Credit Guarantee Corporation is a central government undertaking body to provide credit guarantee on the default of payments by the buyer. It works as an insurance firm who guarantees export payment, if the buyer defaults in making payment.

 

Procedures with ECGC to cover insurance:

Once after finalizing the order, the buyer execute a purchase order to the seller with the terms and conditions as agreed by both. The purchase order should contain full details of buyer and buyer’s bank account details. The exporter approaches Export Guarantee Corporation to get approval on the buyer with amount of limit. Here, the ECGC with their

ecgc

available contact with overseas network finds out the credit worthiness of the said buyer and arrives a figure of creditworthiness and inform the maximum limit of amount can be shipped at any point of time. Export Credit Guarantee Corporation collects premium on the amount of approval and issue insurance policy accordingly.

 

The exporter can apply with ECGC for insurance on shipment wise order as specific insurance policy, or at lump sum as comprehensive policy. If an exporter obtain a specific policy, the contract of insurance is only for that particular shipment. You as an exporter has to pay premium only against the said shipment. If you prefer to obtain a comprehensive policy against any buyer, you can get approval from ECGC, the amount of credit worthiness of the said buyer.

 

The above information is a part of Online international business guide course


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Comments


p.dhanaseelan: difference between ecgc policy and marine insurance policy,whether marine insurance policy should be taken separately

Rambabu JK: Dear Sir, We have received an order from Argentina CTJ company for C 48 tobacco boxes. The volume of business is around US$ 550000 with 60 days differed payment through L/C. . But the company is new for us and this is the first deal. Would you please advise how far we are in safe and what is your suggesion in in the regard - Treat it urgent and we need your sincere advise in return - Rambabu JK, Exports Manager

Surendran Kollerath: Hi Dhanaseelan, Marin Insurance is meant against gooods and ECGC is meant against Buyer.

Surendran Kollerath: Hi Rambabu JK, If you (seller) is in India, Why can not you approach with ECGC for their guidance, as they have a good overseas network to collect credit worthiness of your buyer.

dharmendra r vishwakarma: Dear sir, if my shippment is allready done and i got 90% payment of P.O. Value but know customer want proforma bank guarantee against balance 10% payment and for that PBG our bank ask for ECGC policy, can we issue ECGC policy for my balance payment of 10% only ? please advice for ECGC policy for balance 10% Payment Thank & Regards

Naman : Dear Sir, If we done Shipment already is there is any policy to take by ECGC .

JAYANT MEHTA: IS THERE IS ANY PROCEDURE -IF EXPORTER IN INDIA GIVES ECGC GUARANTEE TO THE THIRD PARTY WHO FINANCE THE EXPORTER . IF EXPORTER CAN GIVE SUCH GURANTEE WHETHER IN CASE IF THE PAYMENT FROM OVERSEAS BUYER GETS DELAYED OR NOT RECD,WILL ECGC WILL MAKE PAYMENT TO THE FIANANCER . IF YES, WHAT INTIALL PROCEDURE WE HAVE TO MAKE .WHETHER ECGC POLICY CAN BE ENDORSSED IN FAVOUR OF FINACIER PARTY BY EXPORTER IN INDIA. PL REPLY IN DETAIL

suja: May I know the opportunities for export from UAE...what are the types of goods imported from India.

Imran khan: we have received an order from Saudi Arabia for onion 1000 boxes each box contain 10 kg differed payment through D/A & CIF incoterm.but the company is new for us and this is the first deal.would you please advise how we get ECGC policy and marine insurance & which bank covered marine insurance. Khan export (Raj.)

Gani: ECGC shall cover both commericial risk/ LC bank risk and Political risk, in nutshell payments with respect to defalut. Marine insurance is for some God destined events and faluts in cargo handling etc

Gani: Dear Imran Khan, For ECGC policy approach nearby ECGC office and they will give you an application form for small exporters policy/ specific shipment policy, fill it and give them also request the ECGC officer to check if the buyer is good or in their negative list. But D/A is very risky if the buyer is new but ECGC gives cover for the commercial risl and political risk(both comprehensive policy) Also marine insurance shall be taken from any Idnian Insurance company like New India Insurance, United India Insurance etc

M.S.ALI: Dear sir- I am starting a new business but I am very confuse ECGC and LC HOW CAN protect the many with new exporter and a function of ecgc and how to work with ecgc pls help me

Poorna Kakaraparthi : I was a Youngster 24 years old in to Export. We are Manufacturers of granite Slabs i was Very much Passionate about International Trade.Right now i was in to a Problem which though i can't finalize what is problem exactly.Please have a Look here is the story of Shipment We initiated a transaction to Egypt 2 containers which valued 30000USD on fob Basis my forwarder sent containers to consignee on Freight collect basis. so Container reached to Egypt port on 4-09-2015 i.e, it is already nearly one month.as payment mode is against documents so we sent documents from Indian bank to consignee bank but they where not responding to our Bank swifts to return back the documents.And we are Facing demarage charges like anything.And my forwarder or Not at all supportive it was no doubt that he was a strong tie-up with my consignee.So he is not responding in a right manner.I was in completely out of hands that i have no idea what to do. i ask them to take to auction and deposit the amount after deducting their charges but my forwarder is saying the money will completely goes to customs so he is asking to me to settle liner and forwarder charges. only thing i wanted to know is how to Convience ForwaderI was Little happy about is i taken a policy for this Shipment in ECGC. So please guide since you have a ample experience in this trade please help me out of this sir.how to answer them in a polite manner and i want to get out of this issue the time is running.

Sushma Raina , Saicrafts Noida: Hello Sir WE have received an order with the buyers bank details as : BANK LEUMI USA, 564 FIFTH AVE, NEW YORK VY 10036. ROUTING#026002794, ACCT#0125485501. The value of the order is 61000usd kindly advice on the credibility of the buyer Regards

Chandru Akki: Hi. Im looking for a BG of USD 500000 tom import precious metals to India. I need this as a gurantee to be drawn on supplier. The supplier will pay for the duties in the country of origin and shall be paid 100% after final assay in India. In reality the supplier is not encashing the BG. Kindly advise

santosh kumar vaishya: I'm Santosh and very new in this export business. I got first order from Mombasa (Kenya) for ONION. Will you please advise me for the same. Should I go for this (onion) export

Rahul Baid : I am an exporter, and using ECGC for credit insurance. Now a days , many private players with international re insurers are in India. There are certain benefits with ECGC: 1.Comprehensive policy, specific buyer/shipment policy 2. Coverage of LC also But major drawback is, It doesn't provide cover for pre shipment. With private players, They provide domestic as well as Pre shipment coverage also. But they only cover DA or open account. Also they provide whole turnover policy , rather then any tailor made. Please advice me, should i continue with ECGC, should i go with private player, or should i use both?

rabikedia84 : I am potato exporter and want ecgs on shipment potato export to srilanka plz give charges in details

S.K.Gupta: Please inform whether ECGC will undertake payment guarantee for tea export to Saudi Arabia.

Mukhtar Mulla: Sir, am an Expoter from Maharashtra, I got PO form UAE of 58 ton onion, but after billof shipping , he ask he can't want products, pl suggest me can I get ECGC claim , or pl suggest right way .to avoid big loss.

Nallasamy.V: Sir am an importer from tamilnadu, I ordered the 80GSM A4 copier papers from Thailand company,they were received 900 dollars from me,but yet not sent my products he can't gave any reason as me.but still he asked more money from me but they were not gave an any shipping details so please help us how can i take or return back my money i need your suggestions.

SHAIKH NISAR AHMED: Please advise , how safe are importers with EGCG sysytem. is there any assurance of Quality receivable as agreed. If the exporters dispatch inferior quality , then ?????

Sanjay agrawal: Iam starting new export buiseness I want icgc policy will you help me

Mukhtar Mulla: Sir. I was made shipments to uae. Before i was got good limit approval from ecgc.also kept sufficient premiums .now ecgc rejects claim by given reason as follows 1) Shipment declaretion done late. 2) Before receipt of previous shipment money Next shipment sent. So kindly guide in this regards

SUNIL AGARWAL: WHAT PRECAUTION SHOULD BE TAKEN IN CASE OF DEFAULT PAYMENT BY THE IMPORTER FOR PERISHABLE GOODS ?

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