ECGC, the Export Credit Guarantee Corporation of India, is a government-owned export credit agency under the Ministry of Commerce and Industry. It insures Indian exporters against the risk that an overseas buyer does not pay, and against some political and country risks. It also supports banks that lend to exporters.
For you as a buyer, ECGC matters because it can make a supplier more willing to offer credit terms such as documents against acceptance or open account.
What ECGC covers for exporters
Cover usually pays a share of the loss, not all of it, and the exporter pays a premium. The exporter must also meet the policy's conditions, such as reporting overdue payments on time.
- Commercial risk: the buyer becomes insolvent, fails to pay, or refuses goods without good reason.
- Political risk: events in the buyer's country, such as restrictions on transfer of money, war or import bans, that stop payment.
- Bank-related cover, which helps banks lend against export orders and receivables.
How it affects you as a buyer
An exporter with ECGC cover may ask ECGC to set a credit limit on your company. ECGC may look at credit reports or information about your business. This is normal and does not mean the supplier distrusts you.
With cover in place, a supplier is more likely to accept deferred payment, such as payment a set number of days after the bill of lading date. Cover does not replace your obligation to pay. If you default, ECGC can pay the exporter a share of the loss and then pursue recovery.
A buyer who defaults on an insured exporter can find it harder to get credit terms from other Indian exporters. Keep payment disputes documented and raise quality claims through proper channels, not by withholding payment informally.
What ECGC does not do
- It does not inspect goods or guarantee quality to you.
- It does not cover you against a supplier who fails to ship.
- It does not replace a letter of credit, which is a bank undertaking to pay.
- It does not usually cover losses from disputes the exporter caused, such as shipping off-spec goods.
Should you ask about it?
If you want deferred terms on repeat orders, it is reasonable to ask whether the supplier uses ECGC cover. Exact policies, premiums and limits change, so check details on ECGC's own published information. This is general guidance, not financial or legal advice.
For the main payment options, see payment terms for agri imports and the safest payment method for a first order.
How we help
When you move from advance terms to credit terms with a processor, we help structure the payment and quality clauses so both sides are protected, and we keep inspection records that support any claim. Ask for a free sourcing review.