Govt approves continuation of NEIA scheme, infusion of Rs 1,650 cr over 5 years

The Union Cabinet on Wednesday approved the continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs 1,650 crore grant-in-aid over five years, from FY2021-2022 to FY2025-2026. 

Capital infusion in NEIA will help tap the vast potential of project exports in focus market. The move has been taken as part of a series of measures to provide a boost to the exports sector.

NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance.

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"The NEIA Trust promotes medium and long term (MLT)/project exports by extending (partial/full) support to covers issued by ECGC (ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd) to MLT/project export and to Exim Bank for Buyer's Credit (BC-NEIA) tied to project exports from India," Cabinet Committee on Economic Affairs (CCEA) said in a statement.

The capital infusion in NEIA Trust will help the Indian Project Exporters (IPE) to tap the huge potential of project exports in focus market. "Support to project exports with Indian content sourced from across the country will enhance the manufacturing in India. Corpus contribution of 1,650 crore will enhance the underwriting capacity of the trust and will enable NEIA to support project exports worth 33,000 crore," the statement added.

"In addition, assuming an average 75% Indian content in the projects, in terms of the report 'Export to Jobs' by World Bank and International Labour Organisation, it is estimated that around 12,000 workers will move into formal sector. Further, the total workers (number of both formal and informal) will increase by 2.6 lakh in the relevant sectors as per estimates based on the report," it added.

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The Union Cabinet also approved capital infusion of Rs 4,400 crore in the state-owned Export Credit Guarantee Corporation (ECGC) and its listing through an initial public offering.

The government will inject Rs 4,400 crore in the ECGC over a period of five years beginning 2021-22, Commerce Minister Piyush Goyal told reporters after the Cabinet meeting.

He also said Rs 500 crore infusion will be done immediately. The listing of ECGC is likely to happen next year. The minister said exports have totalled Rs 185 billion till September 21, 2021, in the current fiscal.