What Is ECGC?

ECGC is an insurer for export payment risk. Its official website describes it as an enterprise of the Government of India under the Ministry of Commerce and Industry that provides export credit insurance to exporters and banks. If an overseas buyer fails to pay, an ECGC policy can cover part of the loss, subject to the policy terms. ECGC cover is optional and is not part of the RBI foreign exchange rules. Terms, premiums and covered percentages are set in each policy, so read the policy wording before relying on it.

For example, a garment exporter ships goods on open credit to a new overseas buyer and takes an ECGC policy for that shipment. If the buyer defaults, the exporter can file a claim under the policy terms.

• Payment risk: ECGC cover addresses buyer default and related trade risks, per its website.
• Bank finance: ECGC also offers products for banks, such as packing credit insurance and post-shipment cover, as listed on its site. Banks may factor this into export finance.
• FEMA: ECGC cover does not change the FEMA duty to realise export proceeds. Read the FEMA export rules guide.
• GST and tax: ECGC premium treatment depends on your tax position. Ask your chartered accountant.

An exporter buys a policy, ships goods, and reports shipments under the policy terms. If a covered loss occurs, the exporter files a claim.

1. The exporter chooses a policy suited to the shipment pattern and buyer risk.
2. The exporter pays the premium under the policy terms.
3. Shipments are declared as the policy requires.
4. If a buyer defaults, the exporter notifies ECGC within the policy conditions.
5. ECGC assesses the claim under the policy and pays the covered share if it is admitted.

You approach ECGC directly or through your bank and apply for a suitable policy. ECGC lists several policies, and the right one depends on your exports and buyers.

1. List your buyers, countries and payment terms.
2. Review ECGC policies such as the Small Exporters Policy and Shipment Comprehensive Risk Policy on main.ecgc.in.
3. Contact ECGC or your bank for a proposal form and quote.
4. Submit the proposal with your export details.
5. Read the policy terms on cover percentage, exclusions and claims before signing.
6. See the ECGC policy guide.

• Mandatory: ECGC cover is not described as mandatory for exporting. Check with your bank if it is a condition of finance.
• Full cover: Policies cover defined risks and a defined share of loss. Check each policy.
• Same as FEMA: ECGC is an insurer. FEMA is the foreign exchange law.
• Only for goods: Check ECGC's current list of policies for services cover.

• Letter of credit: A bank payment undertaking that reduces buyer risk.
• Export realisation: Bringing export proceeds into India.
• AD bank: A bank authorised to deal in foreign exchange.
• FEMA: The foreign exchange law for export receipts.
• Advance remittance: Payment received before shipment.

Every rule and definition on this page is linked to its official source, checked on the dates below.

1. ECGC Limited, Ownership, ministry, products (checked 9 Oct 2026)