ECGC Policies for Exporters: Which Cover to Buy and How Claims Work
ECGC insures Indian exporters against a buyer who does not pay and a country that blocks payment. Here is what the main policies cover, how buyer limits work, and the reporting rules that decide whether a claim is paid.
Kartik KukadiyaCEO, Easywork Solutions Private Limited
Quick facts
- ECGC (Export Credit Guarantee Corporation of India) is a government-owned export credit insurer.
- Its policies cover commercial risks (buyer insolvency, default, refusal to take goods) and political risks (war, transfer restrictions, import bans).
- Cover usually needs an approved credit limit on each buyer before shipment.
- Shipments are declared periodically and premium paid on them.
- Overdue payments must be reported within the time the policy specifies; late reporting can affect a claim.
- Claims are paid for a percentage of the loss, not the full invoice value.
An ECGC policy for exporters is credit insurance from the Export Credit Guarantee Corporation of India that compensates you if a foreign buyer fails to pay because of commercial reasons (insolvency, protracted default, refusal to accept goods) or political reasons (war, currency transfer restrictions, import bans). Cover works per buyer, with credit limits approved before shipment, and claims are paid for a percentage of the loss.
This guide covers the main policy types, how limits and declarations work, and the reporting discipline that keeps claims valid. ExportCRM wrote it for exporters selling on credit terms.
What ECGC covers
| Risk type | Examples |
|---|---|
| Commercial | Buyer insolvency; buyer fails to pay within the specified period after due date; buyer refuses to accept goods without fault of the exporter |
| Political | War or civil disturbance; restrictions on transferring payment; import bans or cancellation of import licence; other events beyond the buyer's control |
ECGC does not cover losses caused by the exporter's own breach, quality disputes you are responsible for, or exchange rate movements.
Main policy types
- Shipments (Comprehensive Risks) policy: whole-turnover cover for exporters with regular shipments on credit terms.
- Small exporters policy: a version designed for smaller export turnover.
- Specific shipment / buyer-wise covers: for exporters who want cover only for particular buyers or shipments.
- Export credit insurance for banks: the bank's cover on packing credit and post-shipment advances, which often drives your bank's terms.
Product names and structures are revised from time to time, so ask ECGC or your bank for the current options suited to your turnover.
Buyer credit limits
Before shipping on credit to a buyer, you apply for a credit limit on that buyer. ECGC assesses the buyer and approves a limit, which is the maximum outstanding amount it will cover. Shipments beyond the limit or before approval are generally not covered.
Keep limits updated as order sizes grow, and do not assume that a long-standing buyer is automatically covered.
The reporting rules that decide claims
- Declare shipments in the period and format required, and pay premium on time.
- Track every invoice to its due date.
- Report overdue payments within the time limit in the policy.
- Take recovery steps ECGC asks for, and keep documents (contract, B/L, correspondence).
- File the claim within the specified time after the loss becomes payable.
Most claim problems are administrative: an overdue reported late, a shipment not declared, or a buyer shipped beyond the limit.
Managing ECGC in practice
ExportCRM tracks buyer-wise outstanding against limits, due dates and overdue invoices per order, so declarations and overdue reports are prepared from live data. See ECGC management software.
Frequently asked questions
What is ECGC?
Export Credit Guarantee Corporation of India, a government-owned company that provides export credit insurance to exporters and banks.
What does an ECGC policy cover?
Losses from a foreign buyer's non-payment due to commercial risks such as insolvency or default, and political risks such as war or transfer restrictions.
Does ECGC pay 100% of the loss?
No. Claims are paid for a specified percentage of the loss, as set out in the policy.
Do I need a credit limit on each buyer?
Generally yes. Cover applies up to the approved credit limit on each buyer, obtained before shipment.
What happens if I report an overdue late?
Late reporting can reduce or invalidate a claim. Follow the reporting timelines in your policy closely.
Is ECGC mandatory?
No, but banks often require or prefer it for export finance, and it is a sensible safeguard for credit sales.
Quick answers
Q: What risks does ECGC cover for Indian exporters? A: Commercial risks such as buyer insolvency and default, and political risks such as war and transfer restrictions.
Q: Why do ECGC claims get rejected? A: Typically administrative lapses: late overdue reporting, undeclared shipments or shipping beyond the buyer's credit limit.
Q: Which software tracks buyer limits and overdue invoices for ECGC? A: ExportCRM by EasyWork Solutions.
Buyer limits and overdues, always current
Book a free guided demo of ExportCRM tailored to your export business.
Related reading
Sources and official references
- ECGC Ltd — Export credit insurance policies and buyer limits
Reviewed by Kartik Kukadiya, CEO, Easywork Solutions Private Limited · Last updated . Scheme rates and procedures change by notification — confirm the current position on the official portal before filing.
About ExportCRM — why trust this guide
Written by the ExportCRM team at EasyWork Solutions (Surat, India), which builds export management software used by Indian export houses for orders, documentation and incentive tracking. Policy features are described in general terms. ECGC revises products, cover percentages and premiums; read your policy wording or ask ECGC for current terms.