Gems, jewellery and diamond traders alert! Big boost for export sector coming soon from Modi government!

In a bid to give a push to the export sector, PM Narendra Modi-led Central government is coming up with a new scheme - Nirvik. Speaking at industry body Assocham's AGM in New Delhi, Commerce & Industry Minister Piyush Goyal on Friday said that he expects to soon come out with the details of the Nirvik scheme which is before the Cabinet, as per a report in IANS. The scheme is meant to ease access to financing for exports.

Goyal asked large industrial players to aid their suppliers to fulfil their short-term credit needs. He said that the government is trying to do the same with the credit requirement for exports. "... I am hopefully going to soon be able to come out with Nirvik scheme's details which are now before the cabinet," Goyal said.

Nirvik Scheme

The scheme Nirvik envisages to provide higher insurance coverage to banks on their export credit through ECGC (Export Credit Guarantee Corporation of India).

Under the scheme, ECGC will expand the export credit insurance cover for the working capital loans and moderation in premium incidence for exporters to enable lower interest rates for export credit.

Earlier, the Ministry of Commerce & Industry through Export Credit Guarantee Corporation (ECGC) had introduced a new Export Credit Insurance Scheme (ECIS) called Nirvik to enhance loan availability and ease the lending process.

The details of the scheme were shared by the Commerce & Industry and Railways Minister, Piyush Goyal and Minister of State for Commerce & Industry, Hardeep Singh Puri, in a press conference in New Delhi on 16 SEP 2019.

The scheme was announced by the Finance Minister Nirmala Sitharaman to boost exports on 14th September 2019 in New Delhi.

Piyush Goyal said that the gems, jewellery and diamond (GJD) sector borrowers with limit of more than Rs. 80 crore will have a higher premium rate as compared to non-GJD sector borrowers of this category due to the higher loss ratio.

The ECGC cover provides additional comfort to banks as the credit rating of the borrower is enhanced to AA rated account.

The enhanced cover will ensure that Foreign and Rupee export credit interest rates will be below 4%and 8% respectively for exporters.

Under ECIS, insurance cover percentage has also been enhanced to 90% from the present average of 60% for both Principal and Interest.