President Pranab Mukherjee on Tuesday stressed the need for a "robust, vibrant and well-functioning ECGC" for India's high export growth, and urged all stakeholders to provide the government enterprise a necessary leadership.The President was addressing here the diamond jubilee celebrations of the Export Credit Guarantee Corporation of India Ltd (ECGC), which is completing its 60 years on Wednesday."A robust, vibrant and well-functioning ECGC can be an enabler for putting the country back on a high export growth path. It is necessary that all stakeholders in the ECGC provide the necessary leadership and direction for it to move forward," the President said. It is a matter of pride that the ECGC has played such a pivotal role in the country's trade sector, he said. "During my tenure as Commerce Minister, I became aware of various schemes and customer initiatives of the ECGC. I recall that huge claims due to foreign exchange transfer delays were being paid to hundreds of exporters on account of defaults in Sudan, Tanzania, Zambia and Nigeria."These compensations by ECGC came in very handy then to exporters who had big exposures on Africa. The organisation has grown over the years significantly and has contributed to stability in our trade sector," the President said.
On the occasion, he said the developed world has been facing crisis such as that of 2008, Eurozone crisis and now there are current commercial and economic risks. He said that the risk landscape has turned adverse, with non-trade barriers being progressively imposed by trading nations. "The dissipation of trust between trading partners has necessitated a real time assessment of the credit standing of overseas buyers. Geopolitical instability, economic downturn, war and terrorism have further hampered growth of the world trade," he said, adding in spite of these global headwinds, our economy is performing well.With GDP growth rising to 7.6 per cent in 2015-16 from 7.2 per cent in the previous year, the President said we are ahead of the rest of the major economic powers. He said that weak global demand had adversely impacted our exports as reflected by a fall of 2.1 per cent in the first quarter of 2016-17. However, at the same time, he said the imports have declined sharply, by 11.5 per cent over this period.
To overcome by improving competitiveness of the domestic industry through better infrastructure and regulation, he said the role of an Export Credit Agency (ECA) in the present day context is of central importance in international trade and investment flows."These institutions are, in a manner of speaking, akin to policy instruments at the disposal of the sovereign to ensure adequate and timely support to national exports by way of extending credit, insurance and guarantees."They develop the platform upon which exporters and bankers sustain existing markets in addition to exploring new markets." the President said. He also said that the absence of an ECA adds to the underlying political, economic and financial uncertainty. The President mentioned that ECAs offer more than just trade credit insurance. "Their role in an economy is multifaceted with protection against risks, enabling access to bank finance, information and expertise in trade finance."