Government Modifies Insurance Cover Category For Exports To Russia

Export Credit Guarantee Corporation (ECGC) said on Monday that it has modified the insurance cover category for Indian exports to Russia, under which revolving limits are approved on a case-to-case basis, amid the ongoing conflict between that country and Ukraine.

The corporation said in a statement that "based on the near-term commercial outlook, it has been decided to modify the country-risk classification of Russia under the short-term and medium and long-term with effect from February 25".

Revising its underwriting policy on Russia, ECGC has now put that country in Restricted Cover Category (RCC-I) from the earlier 'Open Cover' category.

Open cover categories enable policyholders to obtain cover on a more liberalised basis. In a press release, the corporation clarified that coverage on export to Russia has not been withdrawn.

"In view of the prevailing situation, ECGC carried out a review of the country risk rating of Russia as per its extant underwriting policy. Accordingly, with effect from February 25, 2022, the cover category of Russia has been modified from Open Cover to RCC-I for which revolving limits (normally valid for a year) are approved specifically on a case to case basis," it said.

It is further clarified that this change has been made to ensure that ECGC is able to assess and monitor the risks covered under its export credit insurance policies and to place appropriate risk mitigation measures.

The measure, it said, will also enable the exporters and banks in India in assessing the export payment realisation prospects from buyers or banks in Russia.

India's exports to Russia stood at $2.65 billion in 2020-21. The exports to Ukraine during the same period was $451 million.