Lok Sabha Question No. 1242 (UNSTARRED), answered on 2025-02-11
Subject: Measures to Mitigate Risks for Exporters
Ministry: TEXTILES
Asked by: Shri Ramvir Singh Bidhuri, Dr. Vinod Kumar Bind, Shri Pratap Chandra Sarangi

## MEASURES TO MITIGATE RISKS FOR EXPORTERS

## 1242. SHRI PRATAP CHANDRA SARANGI: DR. VINOD KUMAR BIND: SHRI RAMVIR SINGH BIDHURI:

Will the Minister of TEXTILES be pleased to state :

## वस्त्र मंत्री

(a) the details of objectives and outcomes of the collaboration between the Ministry of Textiles and MODIFI India;

(b) the manner in which the collaboration particularly benefit Small and Medium-sized Enterprises (SMEs) in the  textile  and  handloom  sectors  which  often  struggle  with  accessing  financial  resources  for  international trade;

(c) whether there are any measures put in place to mitigate risks for exporters especially in terms of currency fluctuation, political instability in export markets or payment defaults; and

(d) if so, the details thereof?

## उत्तर

## ANSWER

## वस्त्र राज्  य मंत्री ( श्री पबित्र मार्घेररटा

## )

## THE MINISTER OF STATE FOR TEXTILES (SHRI PABITRA MARGHERITA)

- (a) & (b): There is no such collaboration between Ministry of Textiles and MODIFI India.

(c) & (d): For  promotion  of  exports  and  mitigation  of  risks  for  export,  Ministry  of  Textiles  is continuously monitoring export performance of textiles and taking various measures to boost production and exports in consultation with Textiles Export Promotion Councils and Industry Associations.

As per Para 2.55 of Foreign Trade Policy, 2023

- (i) Export  Credit  Agencies  (ECAs)  are  policy  instruments for  Government  to  support  exports.  ECAs support exports by insurance, guarantee and also direct lending. Export Credit Agencies (ECAs) like Export Credit Guarantee Corporation of India Ltd. (ECGC) provides credit insurance support to exports and export credit lending. Covers issued by ECGC to exporters, protect against losses arising out of payment  failures  due  to  insolvency  or  default  of  the  buyers  or  due  to  political  risks.  Exporters  can diversify  their  markets  in  addition  to  protecting  existing  markets  through  such  covers.  ECGC  also supports Medium and Long term (MLT) exports including project exports. Exim Bank is the other ECA in the business of lending for MLT exports and fronting the government's line of credit.

(ii) ECGC indemnifies  losses  of  exporters  in  export  trade  due  to  insolvency  or  default  of  the  buyer. Additionally,  losses  due  to  political  risk  like  war,  sudden  import  restriction,  promulgation  of  law  or decree after the shipment has been affected are also covered. Some of the anti- dumping measures or non-tariff  barriers  introduced  after  a  shipment  has  been  made  will  come  under  the  purview  of  the political risk. In such cases exporter's interest are protected by ECGC.

Further, the Government also provides financial support to various Export Promotion Councils and Trade Bodies under Market Access  Initiative Scheme implemented by Department of Commerce for organising and  participating  in  trade  fairs,  exhibitions,  buyer-seller  meets  etc  at  national  and  international  levels  to boost export.

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