NATIONAL EXPORT INSURANCE ACCOUNT (NEIA)

For facilitating the service of the ECGC (discussed above), the Government of India did set up the National Export Insurance Account (NEIA) in March 2006 to promote medium- and long-term export by providing credit insurance support in the cases where ECGC was not able to provide credit cover on its own because of purely commercial reasons:7

(i) The corpus given to the account was Rs. 66 crore, raised to Rs. 246 crore by 2007–08 and was enhanced to Rs. 2,000 crore in the Eleventh Plan (2007–12).

(ii) Resources of the NEIA will be the corpus, the premium income, interest income and recovery of all the claims paid.

(iii) As per the provision, an exposure equal to ten times corpus can be taken by the NEIA.

The NEIA can cover projects which fulfil the following criteria:8

(i) The project by itself should be commercially viable;

(ii) The project should be strategically important for India, with regard to economic and political relationship of India with the importing country; and

(iii) The exporter should be capable of executing the contract, as evident

from his previous track record.

The use and benefits of the NEIA need to be publicised among its beneficiaries. Meanwhile, many export projects pertaining to Indonesia, Vietnam, Iran, Sudan, etc., are under way. The NEIA will facilitate potential project exporters to enter the international trade area, as it is expected9 to be so. In the era of globalisation it has been praised as a welcome development by the experts and the trade people alike.