The Union Cabinet chaired by the Prime Minister, Narendra Modi, today gave its approval for financial support to the National Export Insurance Account (NEIA) for overseas project exports by increasing the authorized corpus of the NEIA Trust to Rs. 40 billion with risk underwriting capacity upto 20 times of the actual corpus. This is against the present leverage of 10 times and allocation of USD 5 billion for Foreign Currency (FC) funds to Exim Bank out of Forex reserves, for on-lending by way of buyer's credit with NEIA cover.
Budgetary support to NEIA has been Rs. 9.56 billion. This will be augmented through further budget support. 'The proposal will increase the capacity of the NEIA Trust to underwrite more large size projects in difficult countries with reasonably significant Indian content. The project exports would give sustained export earning income of greater lifecycle durability and help in creation of jobs for foreign exchange earnings,' the government said.
NEIA was set up in 2006 as a Public Trust by the Ministry of Commerce and Industry to promote project exports from India. NEIA also supports projects exports which have long credit period for repayment and which are beyond the underwriting capacity of the Export Credit Guarantee Corporation (ECGC).
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