NIRVIK scheme to provide high insurance cover for exporters: FM

NEW DELHI:The government’s proposed scheme to provide enhanced insurance cover and reduce premium for small exporters is timely amid India’s slowing exports, industry said.

Finance Minister Nirmala Sitharaman on Saturday announced NIRVIK (Niryat Rin Vikas Yojana) scheme to provide enhanced insurance cover and reduce premium for small exporters.

“To achieve higher export credit disbursement, a new scheme NIRVIK is being launched which provides for high insurance cover, reduction in premium for small exporters and simplified procedures for claim settlements,” she said while presenting Budget 2020-21 here.


The commerce and industry ministry is working on the scheme also called the Export Credit Insurance Scheme (ECIS) under which the insurance guaranteed could cover up to 90% of the principal and interest. At present, the Export Credit Guarantee Corporation provides credit guarantee of up to 60% loss.

“This is most timely as during the period of uncertainty and slow down, higher default in payments are likely to increase,” said Ajay Sahai, director general, Federation of Indian Export Organisations, adding that it will immensely help the small exporters by increasing the insurance cover given to banks and reducing the premium for exporters.

The scheme comes at a time when India’s exports declined for the fifth month in a row at 1.8% in December to $27.36 billion as 19 of the 30 exporting sectors showed a decline in outbound shipment.

During April-December 2019-20, exports slipped 1.96% to $ 239.29 billion while imports declined 8.9 % to $357.39 billion, leaving a trade deficit of $ 118.10 billion.

The development assumes significance as exporters have raised concerns over availability of credit. Export credit disbursement declined 23% in 2018-19 to Rs 9.57 lakh crore from Rs 12.39 lakh crore in 2017-18.

Tax reimbursement scheme
Sitharaman also said a scheme for exporters will be launched this year to reimburse taxes and duties paid by them to digitally refund duties levied at the centre, state, and local levels.

These taxes include value added tax, electricity duties and fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism.

This scheme for remission of duties and taxes on “exported products will be launched from this year itself,” she said.

The move comes in the wake of Merchandise Export from India scheme found violating global trade norms.

Under the World Trade Organisation (WTO) rules, certain duties like state taxes on power, oil, water, and education cess are allowed to be refunded).

She also said that to develop each district as an export hub, “efforts of the centre and state governments are being synergised and institutional mechanisms are being created in order that every district becomes an export hub”.