Exploring Indian Export Financing to Korea: Government Export Support
Category : Indian Export Financing to Korea |
Sub Category : Government Export Support Posted on 2023-07-07 21:24:53
Exploring Indian Export Financing to Korea: Government Export Support
Introduction:
In today's interconnected global economy, international trade plays a vital role in the growth and development of nations. For countries like India, exporting goods and services is a crucial source of revenue. One of the countries that India has been eyeing as a potential market for exports is Korea. To facilitate and support this bilateral trade, the Indian government has implemented various export financing programs to assist Indian exporters in their endeavors. In this blog post, we will explore the Indian export financing options available and how they can benefit businesses looking to export to Korea.
Export Credit Guarantee Corporation of India (ECGC):
The Export Credit Guarantee Corporation of India (ECGC) is a premier export credit agency that functions under the Ministry of Commerce, Government of India. It provides export credit insurance cover to Indian exporters against the risks of non-payment by overseas buyers. This insurance cover not only offers protection in case of default but also enables exporters to obtain pre-shipment and post-shipment financing.
Pre-shipment Financing:
Pre-shipment financing refers to the credit extended to exporters between the receipt of an export order and the actual shipment of goods. Under the Pre-shipment Credit in Foreign Currency (PCFC) scheme, exporters can avail of finance in the form of packing credit. This finance assists exporters in procuring raw materials, processing, manufacturing, and packing goods for export.
Post-shipment Financing:
Once the goods are shipped, exporters can access post-shipment financing through the Export Finance Scheme. This scheme provides working capital finance to exporters by discounting or granting advances against export receivables. Exporters can avail of finance against bills of exchange, export collections, or exports on consignment basis.
Interest Equalization Scheme:
To enhance the competitiveness of Indian exports, the Government of India has introduced an Interest Equalization Scheme for pre and post-shipment rupee export credit. Under this scheme, eligible exporters receive an interest subsidy on the foreign currency component of their export credit. This subsidy helps exporters to avail credit at lower interest rates and thereby expand their international market presence.
Export Development Fund:
The Government of India has also established the Export Development Fund (EDF) to provide financial assistance for export promotion activities. Indian exporters can avail of the fund to participate in international trade fairs, exhibitions, buyer-seller meets, and trade delegations. This support encourages Indian exporters to showcase their products and services in the Korean market and facilitates business networking opportunities.
Conclusion:
Indian exporters seeking to expand their footprint in Korea can benefit from the various export financing options provided by the Indian government. From credit insurance cover to pre-shipment and post-shipment financing, these initiatives offer much-needed support and financial assistance. Additionally, the Interest Equalization Scheme and Export Development Fund further incentivize exporters to venture into the Korean market. As India and Korea strengthen their trade ties, these export financing programs serve as avenues for Indian businesses to boost their competitiveness and explore new opportunities in the Korean market.
