The government approves the continuation of the NEIA program, an injection of Rs 1,650 cr over 5 years
The Union Cabinet on Wednesday approved the continuation of the National Export Insurance Account (NEIA) program and the injection of a subsidy of Rs 1,650 crore over five years, for fiscal year 2021- 2022 to fiscal year 2025-2026.
The injection of capital into the NEIA will help harness the vast potential of project exports to the target market. This decision was taken as part of a series of measures aimed at boosting the export sector.
NEIA Trust was established in 2006 to promote project exports from India which are of strategic and national importance.
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âThe NEIA Trust promotes Medium and Long Term Project (MLT) exports by extending (partial / full) support to hedges issued by ECGC (ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd) to MLT exports / projects and to Exim Bank for Buyer’s Credit (BC-NEIA) related to India’s export projects, “the Cabinet Committee on Economic Affairs (CCEA) said in a statement.
The capital injection into NEIA Trust will help Indian Project Exporters (IPEs) to tap the huge potential of project exports to the target market. âSupporting exports of projects with Indian content from across the country will improve manufacturing in India. ‘worth 33,000 crores,’ the statement added.
âAdditionally, assuming an average Indian content of 75% in projects, according to the World Bank and International Labor Organization’s Export to Jobs report, it is estimated that around 12,000 workers will be heading to the formal sector. In addition, the total workers (number of formal and informal workers) will increase by 2.6 lakh in the affected sectors according to estimates based on the report, âhe added.
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The Union Cabinet also approved the capital injection of Rs 4,400 crore into the state-owned Export Credit Guarantee Corporation (ECGC) and its listing through an initial public offering.
The government will inject Rs 4,400 crore into the ECGC over a five-year period starting in 2021-2022, Commerce Minister Piyush Goyal told reporters after the cabinet meeting.
He also said that an infusion of Rs 500 crore would be performed immediately. ECGC registration is expected to take place next year. The minister said exports totaled Rs 185 billion until September 21, 2021, as part of the current fiscal year.