New initiative to boost project exports

Commerce minister, Anand Sharma, with the ECGC CMD, Arvind Mehta.

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SME Times News Bureau | 07 Apr, 2011
Union Commerce and Industry Minister, Anand Sharma Wednesday launched a new scheme - 'Buyer's Credit' facility under the National Export Insurance Account (NEIA)' - to boost project exports from India.

"With the introduction of this new product, I am sure, many project exporters would be in a position to venture into new markets, and help diversify India’s exports," said Sharma while launching the Buyer's Credit facility, a scheme which has been developed by Export-Import Bank of India (EXIM Bank) in conjunction with the Export Credit Guarantee Corporation of India Ltd. (ECGC).

The Buyer's Credit facility can be used by sovereign Governments and Government-owned entities overseas to finance import of projects from India on deferred payment terms, said an official statement.

Project exports include civil construction (of structures and infrastructure), turnkey projects, process and engineering consultancy services.

Speaking at the occasion, the commerce minister added, "Currently, not many project exports are venturing out in overseas markets. In fact, the number of project exporters is dwindling. There is vast scope for diversification of markets for project exports from India and for enhancing project export business into the existing market. Developing countries are the major markets for India’s project exports, and these countries demand medium to long-term credits."

Speaking at the launch, EXIM Bank Chairman and Managing Director, T.C.A. Ranganathan said,"The product with its attractive feature of extending credit directly to overseas buyers of projects from India without recourse to Indian exports, will lead to a substantial rise in exports from India. Credit period would normally be 5 to 8 years, however, longer credit period could be considered in deserving cases."

Explaining the features of the product ECGC chairman and managing director Arvind Mehta said, "While EXIM Bank will extend the credit facility, it will obtain credit insurance cover under NEIA through ECGC and the insurance premium will be borne by the project exporter."