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What is the News?
The Ministry of Commerce and Industry has informed the Lok Sabha about the National Export Insurance Account(NEIA) Trust.
What is the National Export Insurance Account(NEIA) Trust?
NEIA Trust was set up in 2006 by the Ministry of Commerce and Industry.
Aim: To ensure the availability of credit risk cover for projects and other high-value exports, which are desirable from the point of view of national interest but which Export Credit Guarantee Corporation of India (ECGC) is unable to underwrite due to capacity constraints.
What types of export transactions are eligible for inclusion under NEIA?
The following types of export transactions are eligible for inclusion under NEIA:
- Only such medium and long-term export projects which are viable and for which reinsurance is not available.
- Exports to countries that are not likely to be covered on purely commercial considerations or are beyond country-exposure limits of ECGC or countries currently facing economic/political difficulties, but where Indian presence is required.
- Transactions involving investments by Indian companies in overseas markets can be covered for the protection of their investments against expropriation risks and limited recourse covers (insolvency risks).
Note: Expropriation is the act of a government claiming privately owned property against the wishes of the owners, ostensibly to be used for the benefit of the overall public.
Source: This post is based on the article “NEIA SCHEME” published in PIB on 1st December, 2021.
