Kolkata, Oct 30, 2010 (Calcutta Tube/IBNS) World Economy can be rejuvenated by promoting trade, said a top official here on Friday. “Trade forms 30% of the global Gross Domestic Product (GDP) and is targeted that by 2020 this should touch the 60% mark,” Geetha Muralidhar, Executive Director, Export Credit Guarantee Corporation of India Ltd (ECGC )said at her maiden interaction with the industry here.
Speaking to the Confederation of Indian Industry (CII) membership, Muralidhar emphasized that given the global trade, breaking down of trade barriers and the resulting interdependent economy, the economic crunch faced world over is not yet over.
“In the last 6 – 7 months other than India, China and Brazil, no country managed to reach the pre crisis levels of trade.”
The Executive Director of ECGC said that the export sector is contributing significantly to the Indian economy and that the country should concentrate on exports.
Muralidhar said that ECGC is supporting the exporters and bankers of exporters and 10% of exports are supported by ECGC.
As per recent data, 5 lakhs crores of rupees has been distributed by all financial institutions and ECGC ensures more than 60% of that credit.
Referring to the former British Prime Minister Gordon Brown’s statement at the G20 summit that the ECAS should play a very vital role to bring the globe out of the economic crisis, Muralidhar said that the ECGC’s role has come to the forefront in the last two years and landmark claims have been paid to exporters and bankers of exporters.
The ECGC, according to the Executive Director, is closely monitoring the world economies. She stressed that securitization of business loans is essential as it has its inbuilt safeguards and the world crisis was led by securitization of mortgage loans.
Muralidhar also said that EDC in Canada and the FE in Australia are replicating the ECGC’s policies of providing adequate trade finance.
She said that the exporters should look at other exporting countries instead of the traditional USA or Europe. In this context, she said that the ECGC rating of African countries is better than OECD ratings.
She also emphasized on ECGC’s priority to Micro, Small & Medium Enterprises (MSMEs) and spoke about the special policy for small exporters and the ECGC’s role in giving special cover to banks who give credit to MSMEs.
Speaking at the interaction, Muralidhar said that India is ranked second in the Trade Confidence Index and that 55% of Indian exports are financed by bankers.