National Export Insurance Account (NEIA):

GS Paper 2:

Topics Covered: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context:

Government has approved financial aid for the period

up by the Ministry of Commerce and administered by from 2021-22 to 2025-26 to NEIA Trust.

What is NEIA?

• National Export Insurance Account (NEIA) is a trust set
• NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance.
• NEIA provides additional support to the insurance cover provided by ECGC for project exports making Indian project exporters more competitive and gain a stronger foothold in various jurisdictions, highlighting India’s capabilities to execute large projects abroad. Export Credit & Guarantee Corporation of India (ECGC).

Objectives:

The National Export Insurance Account (NEIA) Trust aims to ensure the availability of credit risk cover for projects and other high-value exports, which are desirable from the point of view of national interest, but which ECGC is unable to underwrite due to capacity constraints or at terms, which are different from its regular policies.

What does it do?

• The NEIA Trust promotes Medium and Long Term (MLT) /project exports by extending (partial/full) support to covers issued by ECGC to MLT/project export.
• It also supports to Exim Bank for Buyer’s Credit (BC-NEIA) tied to project exports from India.

Step taken by GOI recently:

Government approves continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs. 1,650 crore Grant-in-Aid over 5 years.

Significance of recent move of Government:

The capital infusion in NEIA Trust will help the Indian Project Exporters (IPE) to tap the huge potential of project exports in focus market.

• Support to project exports with Indian content sourced from across the country will enhance the manufacturing in India.
• Corpus contribution of ₹1,650 Crore will enhance the underwriting capacity of the Trust.
• It will enable NEIA to support project exports worth ₹33,000 Crore at full capacity utilization.
• In turn this support will translate into an estimated output of domestically manufactured goods to the tune of ₹25,000 Crore approximately.

NEIA- Performance highlights:

• The NEIA Trust was set up in 2006 to promote Medium and Long-Term (MLT)/ project exports by enabling credit and political insurance.
• NEIA supports projects which are commercially viable and are strategically important.
• The corpus commitment of GOI is Rs.4000 crore and Maximum Liability Permissible is 20 times of the actual corpus.
• The contribution received from the Government of India over the years, as of March 31,2021 was Rs.3,091 crore.
• Since inception, NEIA has extended 213 covers, with a consolidated project value of Rs. 53,000 crores, to 52 countries as of 31st August 2021.
• Its impact in enabling project exports has been most significant in Africa and South Asia.

Insta Curious:

Do you know about the RoDTEP scheme? Reference: read this.

InstaLinks:

Prelims Link:

1. Key features of the scheme.
2. Eligibility
3. Benifits

Mains Link:

Discuss the significance of the National Export Insurance Account (NEIA) Trust.

Sources: PIB.