(Indian Express, 27 January, Mumbai) At a time when India is leaving no stones unturned to boost exports and bring down current account deficit, Essar Steel is unable to execute a $6 billion steel products export deal as the domestic general insurers are reluctant to provide cover to the deal. Such a cover is necessary for the deal to ensure that if overseas buyers fail to pay the export proceeds, the banks which will be funding the deal can recover the amount from insurance companies. Without such a cover, banks and financial institutions will be hesitant to take up financing big export deals. According to industry sources, Essar had approached state-owned Export Credit Guarantee Corporation (ECGC) which has a monopoly in providing such covers but the latter responded with reluctance. “We were not comfortable with the idea taking up such a big export deal. If we take such a huge cover, it will exceed our exposure norms,” said a senior ECGC official.
