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India Continues to Provide Insurance Cover For Shipments to Russia

© AFP 2023 / SAM PANTHAKYThis photo taken on December 21, 2016 shows a container ship (R) docked at India's Adani Port Special Economic Zone (APSEZ) in Mundra
This photo taken on December 21, 2016 shows a container ship (R) docked at India's Adani Port Special Economic Zone (APSEZ) in Mundra - Sputnik International, 1920, 28.02.2022
India’s annual bilateral trade with Russia is valued at more than $10 billion. Exporters are concerned about sanctions imposed by the US and its allies on Russian financial institutions in response to the continuing row between Moscow and NATO.
Export Credit Guarantee Corporation of India (ECGC), a government-owned export credit provider, made clear on Monday that it would continue to provide insurance cover for shipments to Russia.
The ECGC said media reports about credit cover being withdrawn from exports from 25 February is “factually incorrect".
Given the prevailing situation over special military operations in Ukraine, ECGC reviewed the country risk rating of Russia and modified the cover category from Open Cover to Restricted Cover Category – I (RCC-I) for which revolving limits (usually valid for a year) are explicitly approved on a case-to-case basis.
Open cover categories enable policyholders to obtain cover more freely.
The commerce ministry said that changes made in the credit cover policy would enable exporters/banks in India to assess the export payment realisation prospects from buyers and/or banks in Russia.
“The customers have been suitably advised to contact their servicing branch of ECGC for cover on shipments to Russia,” a government statement read.
The government data suggests that India’s annual exports to Russia are worth around $3 billion and India imports more than $7 billion goods from Russia each year.
Sanctions on Russian banks by the US and European countries have rendered transactions in dollars and probably euros and sterling very difficult for Russian dealers.
Indian exporters expect a rupee payment channel with Russia to minimise the impact of sanctions on annual trade, a mechanism which India applied with Iran in the past.
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