Govt approves continuation of NEIA scheme

The Union Cabinet has approved continuation of the National Export Insurance Account (NEIA) scheme and infusion of Rs 1,650 crore Grant-in-Aid over five years. 

What is NEIA?

• NEIA Trust was established in 2006 to promote project exports from India that are of strategic and national importance.

• The NEIA Trust promotes Medium and Long Term (MLT) project exports by extending (partial/full) support to covers issued by ECGC (ECGC Ltd, formerly known as Export Credit Guarantee Corporation of India Ltd) to MLT project export and to Exim Bank for Buyer’s Credit (BC-NEIA) tied to project exports from India.

• The corpus commitment of the government is Rs 4,000 crore and Maximum Liability Permissible is 20 times of the actual corpus. 

• As of March 31, 2021, the contribution received from the government over the years was Rs 3,091 crore.

• Since its inception, NEIA has extended 213 covers, with a consolidated project value of Rs 53,000 crore, to 52 countries. 

• Its impact in enabling project exports has been most significant in Africa and South Asia.

Capital infusion in NEIA

• Capital infusion in NEIA will help 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. 

• NEIA will be able to support project exports worth up to Rs 33,000 crore. It will translate into an estimated output of domestically manufactured goods to the tune of approximately Rs 25,000 crore.

• The fund infusion in NEIA will help create 2.6 lakh new jobs, including around 12,000 in formal sector.

Various export related schemes and initiatives of the Centre

• Foreign Trade Policy (2015-20) extended upto September 30, 2021 due to the COVID-19 pandemic situation.

• Rs 56,027 crore released in September 2021 to liquidate all pending arrears under all script base schemes to provide liquidity in the COVID-19 times.

• Roll out of a new scheme — Remission of Duties and Taxes and Exported Products (RoDTEP). Rs 12,454 crore sanctioned for the scheme in the FY 2021-22. It is a WTO compatible mechanism for reimbursement of taxes/ duties/ levies, which are currently not being refunded under any other mechanism, at the central, state and local level.

• Support to textiles sector was increased by the remission of central/state taxes through the ROSCTL scheme, which has now been extended till March 2024.

•  Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase FTA utilisation by exporters.

• A comprehensive “Agriculture Export Policy” to provide an impetus to agricultural exports related to agriculture, horticulture, animal husbandry, fisheries and food processing sectors, is under implementation.

• Promoting and diversifying services exports by pursuing specific action plans for the 12 Champion Services Sectors.

• Promoting districts as export hubs by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district.

• Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced.

• Package announced to support domestic industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports

• Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme and Transport and Marketing Assistance (TMA) schemes to promote trade infrastructure and marketing.

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