What Does an ECGC Export Credit Insurance Policy Cover for Small Exporters?
- Author:
- Manoj Sharma
- Verified by:
- Editorial team
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- Last modified:
Short answer
An ECGC policy for exporters is credit insurance that pays a share of your loss when an overseas buyer or its bank fails to pay for a covered export. ECGC is owned by the Government of India. Its standard policy covers 90% of the loss. Small exporters can choose the Small Exporters Policy or the Micro Exporters Policy instead.
| Applies to | Governed by | Deadline | Penalty | Last verified |
|---|---|---|---|---|
| Indian exporters of goods and services who sell on credit terms; ECGC sets eligibility by policy, such as export turnover up to Rs 5 crore for the Small Exporters Policy and up to Rs 100 lakh for the Micro Exporters Policy | The terms of each ECGC Ltd policy (a Government of India enterprise under the Ministry of Commerce and Industry); FEMA (Export and Import of Goods and Services) Regulations, 2026 still govern realisation of the export value | Shipment declarations by the 15th of the next month; overdue bills declared by the 15th of the next month; claims within 360 days of the bill's due date or 540 days from the end of the policy cover, whichever is earlier (standard policy) | No government penalty. Missed premium, declarations or claim deadlines are breaches of the policy terms, and ECGC asks for an explanation of any such lapse when a claim is filed | 8 Oct 2026 |
What is an ECGC export credit insurance policy?
An ECGC export credit insurance policy protects an Indian exporter against non-payment by an overseas buyer or by the bank that opened a letter of credit. ECGC Ltd, formerly Export Credit Guarantee Corporation of India Ltd, was set up in 1957, is wholly owned by the Government of India and works under the Ministry of Commerce and Industry (ECGC company overview).
- Buyer risk: Commercial risks covered under the standard policy are the buyer's insolvency, the buyer's failure to pay within a set period (normally four months from the due date) and the buyer's failure to accept the goods, subject to conditions (ECGC Shipments Comprehensive Risks Policy page).
- Bank risk: Where the export is under a letter of credit, the policy covers insolvency of the LC opening bank and its failure to pay within a set period, normally four months from the due date (ECGC SCR page).
- Political risk: Covered political risks include payment transfer restrictions by the buyer's government, war or civil disturbance in the buyer's country, new import restrictions or cancellation of an import licence, and extra freight or insurance from an interrupted voyage (ECGC SCR page).
- Share of loss: ECGC pays a percentage of the loss, not the full invoice. The standard policy covers 90% (ECGC SCR page), and the IT-enabled services single-customer policy covers 80% (ECGC SITES page).
- Other services: ECGC also provides information on the creditworthiness of overseas buyers, country credit ratings and help with recovering bad debts (ECGC company overview).
ECGC also sells separate covers to banks that lend to exporters. This page covers the policies an exporter buys directly. For a short definition, see what is ECGC.
Which ECGC policy applies to which kind of exporter?
The ECGC policy that applies depends mainly on your annual export turnover and whether you export goods or services. Goods exporters above Rs 5 crore use the standard Shipments Comprehensive Risks Policy. Smaller goods exporters can use the Small Exporters Policy or the Micro Exporters Policy. Service exporters have separate services policies.
| Policy | Who is eligible | Cover and minimum premium | Best for |
|---|---|---|---|
| Shipments Comprehensive Risks Policy (SCR), also called the Standard Policy | Exporters with annual export turnover above Rs 500 lakh; all shipments must be covered, with exports to associates and LC-backed shipments allowed as exclusions (ECGC SCR page) | 90% cover; minimum premium Rs 10,000, adjusted against premiums and non-refundable (ECGC SCR page) | Established goods exporters selling to many buyers on credit |
| Small Exporters Policy (SEP) | Exporters whose anticipated export turnover for one year does not exceed Rs 5 crore; maximum liability capped at Rs 2 crore (ECGC Small Exporters Policy page) | Same commercial and political risks as the standard policy; minimum premium Rs 5,000 for the policy period (ECGC SEP page) | Small goods exporters who want whole-turnover cover |
| Micro Exporters Policy (MEP), formerly the SME policy | Traders, manufacturers and service providers with export turnover up to Rs 100 lakh, with or without an MSME certificate (ECGC Micro Exporters Policy page) | 90% cover; processing fee Rs 1,000; minimum premium Rs 25,000; maximum loss limit Rs 15 lakh and single loss limit Rs 5 lakh (ECGC MEP page) | Micro exporters with a few buyers and small outstanding amounts |
| IT-Enabled Services Policy, Single Customer (SITES) | Exporters with contracts to render services over a defined period, billed weekly, monthly or quarterly; one policy per buyer (ECGC SITES page) | 80% cover; non-refundable processing fee Rs 2,000; premium paid upfront on the approved loss limit (ECGC SITES page) | IT-enabled service firms with one large overseas client |
| Services Policy (specific or whole-turnover) | Indian companies with contracts to provide technical or professional services to foreign principals (ECGC Services Policy page) | Whole-turnover versions cover all services contracts concluded over the next 24 months (ECGC Services Policy page) | Consultancy and professional service exporters with repeat contracts |
| Export Turnover Policy (ETP) | Large exporters paying at least Rs 20 lakh a year in premium (ECGC Export Turnover Policy page) | 90% cover; premium in four quarterly instalments (ECGC ETP page) | Large exporters seeking premium discounts |
How does an exporter get and use an ECGC policy?
An exporter gets an ECGC policy by submitting the proposal form for the chosen policy with supporting documents, before the shipments to be covered. ECGC then fixes credit limits on buyers. ECGC's FAQ says cover starts only from the date ECGC receives the proposal (ECGC FAQ, buyer-wise policy).
- Pick the policy that matches your turnover and business type using the eligibility rules on ECGC's product pages, such as the Small Exporters Policy or the Micro Exporters Policy.
- Fill in the proposal form and attach the listed enclosures, self-attested with the firm's seal. These include your IEC, PAN of the firm and its proprietor, partners or directors, address proof, the latest audited accounts, six months of bank statements and a brief on your credit management system (ECGC list of enclosures to the proposal form).
- Obtain a valid credit limit from ECGC on each buyer and LC opening bank before shipping. The standard policy lists this as an obligation of the exporter (ECGC SCR page).
- Pay premium in advance and keep enough premium deposit with ECGC, based on your turnover projection, for the shipments you plan to make (ECGC Dos and Donts brochure, point 3).
- Declare all shipments made in a month by the 15th of the next month in the prescribed format, and file a NIL declaration if there were none (ECGC Dos and Donts brochure, point 8).
- Before each shipment, check that the buyer is not on ECGC's list of buyers with adverse experience, which is available to holders of whole-turnover policies (ECGC Dos and Donts brochure, point 6).
- If a bill stays unpaid, declare it as overdue by the 15th of the next month, take recovery steps, and file the claim within the time limit (ECGC Dos and Donts brochure, points 9 to 12).
How is the ECGC premium worked out?
ECGC premium depends on your projected export turnover, the payment terms and the risk class of the buyer's or LC bank's country. ECGC's FAQ says premium rates vary with the terms of payment, the country classification and whether comprehensive or political risks are covered (ECGC FAQ, premium rates). ECGC does not publish a single flat rate on these product pages, so ask your nearest ECGC branch for a quote.
- Under the Small Exporters Policy, premium is based on projected annual exports, with a minimum of Rs 5,000 (ECGC SEP page).
- Under the standard policy, a No Claim Bonus of 5% a year applies if there is no claim, up to a maximum of 50% (ECGC SCR page).
- Under the single-customer services policy, premium is charged on the loss limit approved on the buyer, whatever the actual billing (ECGC SITES page).
What does an ECGC policy not cover?
An ECGC policy does not cover every reason a buyer may not pay. For its buyer-wise short-term policy, ECGC's FAQ lists commercial disputes, including quality disputes, unless the exporter gets a court decree in the buyer's country. It also excludes loss or damage to goods, exchange rate fluctuation and the exporter's own failure to meet the contract (ECGC FAQ, risks not covered).
- Causes inherent in the nature of the goods.
- The buyer's failure to obtain import or exchange authorisation in its own country.
- Negligence by the exporter.
When does ECGC cover suit a small exporter?
ECGC cover suits a small exporter most when it ships on credit terms, such as documents against acceptance or open account, and a single buyer default would hurt the business. Shipments backed by letters of credit can be excluded under the standard policy (ECGC SCR page). An exporter paid fully in advance carries little buyer payment risk. Compare the minimum premium and paperwork with the size of your receivables.
- Useful: regular credit sales to several overseas buyers.
- Useful: buyers in countries with transfer or political risk.
- Less relevant: full advance payment before shipment, covered on the export payment terms page.
What documents does ECGC need with an export credit insurance claim?
ECGC needs bank-certified copies of the contract or order, invoice, transport document, collection and non-payment advice, and proof of recovery steps with an ECGC claim. The full list is in ECGC's claim checklist, and extra documents apply to disputes, insolvency, resale or political risk (ECGC checklist of documents for a policy claim).
| Claim situation | Key documents ECGC lists | Best for |
|---|---|---|
| Every claim | Contract, order or LC; invoice; bill of lading, airway bill or lorry receipt; collection advice; non-payment advice from the foreign bank; unpaid bill of exchange; shipping bill or EDPMS data; protest note; correspondence with the buyer and between the banks | All policyholders filing a claim |
| Buyer accepted the goods but did not pay | Proof of action through a debt collecting agency or lawyer and the Indian Consulate abroad, with the correspondence | Protracted default by a buyer who took delivery |
| Buyer raised a dispute | Final judgment in the exporter's favour from a competent court in the buyer's country | Quality or contract disputes |
| Buyer became insolvent | Proof of insolvency and the claim lodged with the official receiver or insolvency court, with its admission | Buyer bankruptcy |
| Goods resold, re-imported, auctioned or abandoned | Correspondence and order from the alternate buyer, bank advice of resale proceeds, proof of storage, freight and other expenses, RBI or AD approval where applicable | Goods refused by the original buyer |
| Non-payment under an LC | LC and amendments advised by an Indian bank, discrepancy advice from the LC bank and the exporter's note on why the discrepancy is not justified | Exports under letters of credit |
| Political risk | Proof the buyer paid in local currency (transfer delay), proof of import licence cancellation, or proof of diversion costs | Payment blocked by the buyer's country |
What happens if an exporter misses ECGC policy obligations?
If an exporter misses ECGC policy obligations, cover or a claim can be affected. ECGC's claim checklist asks the policyholder to explain any lapse, such as late premium, late shipment or default declarations, or late filing of the claim (ECGC claim checklist, item 16). These are contract terms, not government penalties.
- Late premium: For the single-customer services policy, ECGC's FAQ says that if quarterly premium is delayed, cover is not available for services from the start of the quarter to the date of remittance (ECGC FAQ, ITES premium).
- No credit limit: ECGC asks exporters to make sure every shipment is covered by a valid credit limit or loss limit on the buyer on the right payment terms before shipping (ECGC Dos and Donts brochure, point 5).
- Shipping to a defaulter: ECGC tells exporters not to make further shipments to a buyer whose earlier bills are unpaid after the original due date without its prior approval (ECGC Dos and Donts brochure, Donts point 3).
- Unapproved changes: Extending a due date, changing payment terms, giving the buyer a discount or signing a compromise needs ECGC's prior approval (ECGC Dos and Donts brochure, Donts points 4, 6 and 7).
- FEMA still applies: An insurance claim does not change your FEMA duties. Regulation 5 requires realisation within nine months of shipment or invoice, and Regulation 6 lets the AD bank allow a reduction or non-realisation of export value on your request (FEMA Export and Import Regulations, 2026).
If you have missed a declaration or deadline, contact your ECGC branch at once, file the pending declaration, and keep a written record of the reason. For the unpaid export itself, talk to your AD bank about the realisation status; see export proceeds not realised and write-off of export bills.
What is the timeline for ECGC declarations, premium and claims?
The ECGC timeline runs monthly while the policy is in force. Shipments and overdue bills are both declared by the 15th of the following month. Under the standard policy, claims must be filed within 360 days of the bill's due date or 540 days from the expiry of the policy cover, whichever is earlier (ECGC SCR page).
| Trigger event | Due date | Filed where | Best for |
|---|---|---|---|
| Before shipments start | Premium paid in advance, with enough premium deposit kept at all times (ECGC SCR page) | ECGC, as premium deposit | All whole-turnover policyholders |
| Shipments made in a month | By the 15th of the next month, including a NIL declaration (ECGC Dos and Donts brochure) | ECGC, in the prescribed format | SCR, SEP and similar declaration-based policies |
| Bill unpaid more than 30 days after due date | By the 15th of the next month, and every month until paid or claimed (ECGC SCR page) | ECGC, in the prescribed format | Standard policy holders |
| Bill unpaid more than 60 days after due date | By the 15th of the next month (ECGC Dos and Donts brochure, point 9) | ECGC, in the prescribed format | SEP and MEP holders |
| Waiting period for a protracted default claim | Normally four months from the due date under the standard policy, halved under SEP (ECGC SEP page), and two months under MEP (ECGC MEP page) | Not a filing; loss is treated as ascertained after this period | Exporters planning cash flow after a default |
| Filing the claim | Within 360 days of the bill's due date or 540 days from the end of cover, whichever is earlier (ECGC SCR page) | ECGC, on the claim form with the checklist documents | SCR, SEP and ETP holders |
| Resale or reshipment with loss under 25% of invoice value | Inform ECGC within 30 days of the resale or reshipment (ECGC Dos and Donts brochure, Donts point 5) | ECGC | Exporters whose buyer refused the goods |
What mistakes do exporters make with an ECGC policy?
- Shipping first: Shipping before the proposal reaches ECGC leaves those shipments outside cover, since cover runs from the date the proposal is received (ECGC FAQ, buyer-wise policy).
- No buyer limit: Shipping to a buyer without a valid credit limit on the actual payment terms, such as moving from DP to DA without approval.
- Missed NIL return: Skipping the monthly declaration in a month with no shipments, instead of filing a NIL declaration.
- Expecting full payout: Assuming the claim pays 100% of the invoice. Cover is a percentage, such as 90% under the standard policy.
- Quiet settlements: Agreeing a discount or compromise with the buyer without ECGC's prior approval.
- Forgetting recovery: Not sharing later recoveries with ECGC. Recoveries are shared in the same ratio as the claim was settled (ECGC Dos and Donts brochure, point 12).
How did we verify this?
Every rule, deadline and form on this page is linked to its official source, checked on the dates below.
- ECGC Ltd: Shipments Comprehensive Risks Policy (SCR), Eligibility, cover, minimum premium, obligations, risks covered (checked 8 Oct 2026)
- ECGC Ltd: Small Exporters Policy (SEP), Eligibility, maximum liability, minimum premium, overdue reporting, waiting period (checked 8 Oct 2026)
- ECGC Ltd: Micro Exporters Policy (MEP), erstwhile SME policy, Features at a glance; eligibility up to Rs 100 lakh (checked 8 Oct 2026)
- ECGC Ltd: IT-Enabled Services Policy, Single Customer (SITES), Cover 80%, processing fee, premium on loss limit (checked 8 Oct 2026)
- ECGC Ltd: Services Policy, Types of services policy; 24-month whole-turnover cover (checked 8 Oct 2026)
- ECGC Ltd: Export Turnover Policy (ETP), Eligibility and premium instalments (checked 8 Oct 2026)
- ECGC Ltd: Frequently Asked Questions (short-term policies), BP (ST) risks not covered, proposal, premium rates; ITES premium (checked 8 Oct 2026)
- ECGC Ltd: Company overview, Ownership, functions (checked 8 Oct 2026)
- ECGC Ltd: Policies Do's and Don'ts brochure, Common Do's points 3 to 12; Common Don'ts points 3 to 7 (checked 8 Oct 2026)
- ECGC Ltd: Enclosures to be submitted along with the proposal form (checked 8 Oct 2026)
- ECGC Ltd: Checklist of documents to be submitted with claim form, Sections A to G (checked 8 Oct 2026)
- RBI: FEMA (Export and Import of Goods and Services) Regulations, 2026, Regulations 5 and 6 (checked 8 Oct 2026)
Frequently asked questions
Is ECGC export credit insurance mandatory for Indian exporters?
ECGC export credit insurance is not described as mandatory on ECGC's product pages; the exporter chooses to submit a proposal. ECGC separately offers credit insurance covers to banks that finance exporters, which your bank handles on its side. Under a whole-turnover policy such as SCR, though, all shipments must be covered once you take the policy, with permitted exclusions.
How much does the ECGC Small Exporters Policy cost?
The ECGC Small Exporters Policy premium is based on your projected exports for the year, with a minimum premium of Rs 5,000 for the policy period (ECGC SEP page). A no claim bonus of 5% is granted each year. The actual rate depends on payment terms and buyer country, so ask ECGC for a quote.
Can freelancers or service exporters take an ECGC policy?
Service exporters can take ECGC cover. The Micro Exporters Policy is open to service providers with export turnover up to Rs 100 lakh (ECGC MEP page). ECGC also offers a Services Policy for technical and professional service contracts and a single-customer policy for IT-enabled services billed periodically.
Does ECGC cover a buyer's refusal over a quality dispute?
ECGC generally does not pay for commercial disputes, including quality disputes raised by the buyer. ECGC's FAQ says such disputes are not covered unless the exporter obtains a decree in its favour from a competent court in the buyer's country (ECGC FAQ). Keep clear contracts and delivery proof to reduce this risk.
What share of the loss does an ECGC claim pay?
An ECGC claim pays the cover percentage of the ascertained loss, not the whole invoice. The standard SCR policy and the Micro Exporters Policy list 90% cover (ECGC SCR page). The IT-enabled services single-customer policy lists 80% (ECGC SITES page). The exporter carries the rest.
Does an ECGC claim settle the FEMA realisation requirement?
An ECGC claim does not by itself close your FEMA obligations. FEMA Regulation 5 sets the realisation period, and Regulation 6 lets your AD bank allow reduction or non-realisation of export value on request (FEMA Regulations, 2026). Inform your AD bank about the unpaid bill and the claim.
Which documents go with an ECGC proposal form?
An ECGC proposal form needs self-attested copies of your IEC, PAN of the firm and its owners or directors, address proof, latest audited accounts, six months of bank statements and a note on your credit management system (ECGC enclosures list). MSME, RCMC, AEO and LEI certificates are added if you hold them.