Export-Import Bank of India (EXIM Bank) Support for Exporters

EXIM Bank Overview: Empowering Indian Exporters

What is EXIM Bank?

The Export-Import Bank of India (EXIM Bank) is a specialized financial institution that provides comprehensive support to Indian exporters. Established in 1982 under the Export-Import Bank of India Act, it plays a crucial role in promoting and financing the international trade activities of Indian businesses. EXIM Bank’s services are pivotal in enhancing India’s export capabilities and facilitating access to global markets.

By providing financing solutions, risk mitigation tools, and market access support, EXIM Bank ensures that Indian exporters are well-equipped to compete in the global marketplace. It operates with a clear mandate to contribute to the country’s economic growth by boosting the export sector.

History and Establishment of the Export-Import Bank of India

EXIM Bank was established by an Act of Parliament with the primary aim of promoting and financing India’s foreign trade. It was created to address the growing need for export financing and provide Indian businesses with a platform to enhance their international competitiveness. Over the years, EXIM Bank has evolved into a central institution for export promotion and trade financing, with a wide range of products and services to support businesses across various sectors.

Since its inception, EXIM Bank has been instrumental in advancing India’s export interests by facilitating access to capital, offering guidance on export markets, and strengthening the overall trade ecosystem.

Mandate and Objectives of EXIM Bank

EXIM Bank’s mandate revolves around providing financial assistance to Indian exporters and enhancing India’s position in international markets. Its key objectives include:

• Providing Export Financing: EXIM Bank offers export credit, both pre-shipment and post-shipment, to enable exporters to fulfill international orders.
• Risk Mitigation: The bank helps businesses manage risks related to currency fluctuations, payment delays, and political instability through various risk mitigation products like insurance and hedging.
• Promoting Market Access: EXIM Bank actively supports Indian exporters in finding new global markets and expanding their reach through market research and promotional activities.
• Facilitating Trade Finance: The bank offers trade finance solutions that help businesses manage their working capital needs and streamline international transactions.
  

How EXIM Bank Supports the International Growth of Indian Exporters

EXIM Bank is committed to empowering Indian exporters by providing not just financial support, but also comprehensive services to help businesses thrive in international markets. Here’s how EXIM Bank makes a difference:

• Financing Solutions for Exporters: By offering various forms of export credit, EXIM Bank ensures that exporters can meet production requirements and fulfill international contracts without worrying about cash flow constraints.
• Support for Sector-Specific Exports: EXIM Bank understands the unique needs of different industries and offers customized financing and risk mitigation products that are suited to sectors such as textiles, pharmaceuticals, engineering, and more.
• Export Credit Guarantee: The bank partners with the Export Credit Guarantee Corporation (ECGC) to provide export insurance, safeguarding exporters against payment defaults and non-receipt of funds from foreign buyers.
• Market Expansion Support: Through its various market access schemes, EXIM Bank helps businesses explore new international markets by providing market research, connecting exporters with potential overseas clients, and promoting Indian products globally.

By facilitating easy access to credit, offering specialized financial products, and enhancing market outreach, EXIM Bank has become a key enabler for businesses seeking to expand their export operations.

Key Services Offered by EXIM Bank

EXIM Bank offers a wide array of services that cater to the diverse needs of exporters, from financing solutions to risk management tools. Below are the key services offered by EXIM Bank:

Export Credit and Financing

EXIM Bank provides both pre-shipment and post-shipment credit to help exporters manage their working capital needs and ensure smooth operations in international trade.

• Pre-shipment Credit: This financing is provided to exporters to meet the costs of production and shipment before goods are exported. EXIM Bank offers flexible repayment terms and competitive interest rates.
• Post-shipment Credit: After the shipment of goods, EXIM Bank provides credit to help exporters manage the gap between shipment and payment receipt from foreign buyers. This type of credit ensures exporters can continue their business operations without financial interruptions.

Trade Finance

Trade finance solutions offered by EXIM Bank help exporters manage their transactions with foreign buyers. This includes various instruments such as:

• Letters of Credit (LC): EXIM Bank facilitates LCs, which guarantee payment to the exporter upon fulfilling agreed terms. This reduces payment risks and ensures safe transactions.
• Documentary Collections: EXIM Bank also offers services for handling document-based transactions, providing exporters with secure methods to ensure payment upon the shipment of goods.
• Working Capital Finance: The bank provides short-term working capital financing to help exporters fulfill orders without the burden of liquidity constraints.

These trade finance solutions enable exporters to safeguard their international transactions, mitigate risks, and ensure timely payments.

Foreign Exchange Solutions

Given the global nature of exports, managing foreign exchange (forex) is crucial. EXIM Bank offers a range of forex-related services that help exporters manage currency fluctuations, ensuring the stability of their financial operations:

• Hedging Options: EXIM Bank provides hedging solutions to protect exporters against adverse movements in foreign exchange rates. These products help exporters lock in favorable exchange rates and avoid unexpected losses due to currency volatility.
• Foreign Currency Accounts: EXIM Bank allows exporters to maintain foreign currency accounts, making it easier for them to handle payments from overseas customers and settle transactions in different currencies.

Market Access Assistance

To succeed in international markets, exporters need to understand market dynamics, consumer preferences, and regulations. EXIM Bank offers market access assistance to help Indian businesses expand their global footprint:

• Market Research and Development: EXIM Bank conducts research to help exporters identify potential markets and opportunities, offering insights into customer demand, competitor analysis, and market trends.
• Export Promotion Programs: EXIM Bank facilitates the participation of Indian exporters in international trade fairs, exhibitions, and buyer-seller meets, helping them showcase their products and connect with international buyers.
• Trade Delegations and B2B Meetings: EXIM Bank organizes trade missions and business-to-business (B2B) meetings, facilitating direct interaction between Indian exporters and foreign buyers to secure deals and explore new market opportunities.

EXIM Bank’s services empower Indian exporters to scale their businesses, manage risks, and tap into new international markets. With comprehensive financial solutions, risk management tools, and market access support, EXIM Bank plays a pivotal role in the growth of India’s export sector and helps businesses expand globally with confidence.

Financing Options for Indian Exporters

Indian exporters often face challenges in managing cash flow, securing working capital, and financing large projects. EXIM Bank provides a broad range of financial solutions designed to meet the unique needs of exporters, ensuring they have the necessary resources to grow and compete in the global market.

Short-Term and Long-Term Financing

EXIM Bank offers both short-term and long-term financing options to cater to exporters at different stages of their business cycles.

Pre-shipment Credit

Pre-shipment credit is a short-term loan given to exporters to finance the costs of producing and packaging goods before shipment.

Purpose and Benefits for Exporters:

• Helps manage production costs without liquidity strain
• Ensures timely fulfillment of orders
• Provides the working capital needed to execute export orders
  

Eligibility Criteria:

• Registered exporters with a valid Exporter Importer Code (IEC)
• A solid track record of exports and a good credit history
  

Repayment Terms and Conditions:

• Typically repaid within 180 days
• Interest rates are competitive and subject to EXIM Bank’s policies
  

Post-shipment Credit

Post-shipment credit provides financing after goods are shipped, allowing exporters to bridge the gap between shipment and payment receipt from foreign buyers.

Types of Post-shipment Financing Options:

• Prepaid Bills Discounting: Financing against unpaid bills.
• Packing Credit: Financing against the goods in transit.
• Export Bill Discounting: Discounting bills before their maturity date.
  

How Exporters Can Access These Funds:

• Apply through EXIM Bank’s online portal or local branches
• Documentation such as shipping bills, invoices, and export contracts are required
• EXIM Bank evaluates based on the exporter’s creditworthiness and transaction history
  

Export Credit for Specific Sectors

EXIM Bank provides tailored financial products for specific industries like textiles, pharmaceuticals, and engineering. These products are designed to address the unique challenges and requirements of each sector.

• Textile Export Financing: Special loans for fabric and garment manufacturers
• Pharmaceutical Export Financing: Support for exporters dealing in drugs, vaccines, and medical equipment
• Engineering Export Financing: Financing solutions for exporters of machinery and industrial equipment
  

These sector-specific financial products help exporters in these industries access the resources they need to fulfill international orders efficiently.

Working Capital Finance

Working capital is crucial for exporters to manage daily operations and cover production and shipping costs. EXIM Bank provides working capital solutions to exporters, ensuring they have the liquidity required for smooth business operations.

The Importance of Working Capital for Exporters:

• Ensures that exporters can maintain a steady flow of goods and services
• Helps manage short-term expenses such as raw material procurement, labor, and operational costs
• Reduces dependency on personal funds or high-interest loans
  

How EXIM Bank Provides Working Capital Solutions:

• Offering flexible loan structures for working capital needs
• Providing advances against export receivables
• Access to short-term financing with competitive interest rates
  

Types of Working Capital Financing Available:

• Cash Credit: Short-term credit line based on the exporter’s receivables
• Bill Discounting: Financing against unpaid export bills
• Overdraft Facility: Allows exporters to withdraw more than their account balance up to an agreed limit
  

Export Project Finance

For large-scale projects, exporters often need project-specific financing to cover the costs of new ventures, machinery, or infrastructure.

Overview of Export Project Finance for Large Projects:

• EXIM Bank offers specialized financing to support significant export-related projects
• Helps exporters fund large capital expenditures or project-based expenses
• Financing can cover production units, factory setup, or major export initiatives
  

How EXIM Bank Supports Project-Based Financing:

• Provides long-term loans to cover the costs of major exports
• Structured as project financing with flexible repayment options
• Often includes industry-specific terms based on project requirements
  

Eligibility Requirements and Application Process:

• Exporters with a sound financial history and a proven track record of handling large-scale projects
• Submission of a detailed project proposal outlining the scope, financial projections, and expected outcomes
• EXIM Bank evaluates the feasibility and profitability of the project before approving the financing
  

Government Export Schemes Supported by EXIM Bank

Government-Backed Schemes for Exporters

The Government of India has introduced several schemes to boost the export sector, and EXIM Bank plays a vital role in helping exporters access these benefits. These schemes are designed to reduce financial barriers, mitigate risks, and enhance the global competitiveness of Indian businesses. EXIM Bank facilitates the application process and ensures that exporters can take full advantage of these government-backed initiatives.

• Lines of Credit (LOCs) under the Indian Development and Economic Assistance Scheme (IDEAS)
  • Description: EXIM Bank extends Lines of Credit to overseas governments, financial institutions, and regional banks to finance exports of Indian goods, services, and infrastructure projects on deferred payment terms. These LOCs are a cornerstone of India’s foreign trade and economic diplomacy, often used to support developmental projects in partner countries.
  • Government Support: The Government of India, through the Ministry of External Affairs and Ministry of Finance, backs LOCs under the IDEAS scheme to promote project exports and strengthen bilateral trade ties. For instance, in 2020, the government announced a release of ₹3,000 crore to EXIM Bank for LOCs under IDEAS to boost project exports.
  • Impact: LOCs facilitate exports of infrastructure projects (e.g., roads, power plants, railways), equipment, and services to countries in Africa, Asia, and other regions. They are risk-free for Indian exporters, as EXIM Bank covers 90% of the contract value, with overseas importers paying a 10% advance.
  • Examples:
    • $400 million LOC to the Maldives for infrastructure projects.
    • $100 million LOC to West African countries for trade promotion.
      
• Buyer’s Credit under the National Export Insurance Account (BC-NEIA)
  • Description: This program provides financing to overseas buyers to purchase Indian goods and services, particularly for large-scale infrastructure and developmental projects. It enhances India’s project export capabilities by offering competitive credit terms.
  • Government Support: The BC-NEIA is backed by the Government of India through the Department of Commerce and administered by EXIM Bank in collaboration with the Export Credit Guarantee Corporation (ECGC). It mitigates risks for Indian exporters by ensuring payment security.
  • Impact: Supports high-value project exports in sectors like energy, transportation, and construction, making Indian exports competitive in global markets. For example, EXIM Bank financed $200 million for housing and infrastructure projects in Uzbekistan in 2019.
    
• Export Credit and Financing Programs
  • Description: EXIM Bank provides pre-shipment and post-shipment export credit to Indian exporters, including working capital loans, export bill discounting, and export production finance. These schemes help exporters manage cash flow and mitigate risks in international trade.
  • Government Support: These programs align with the Foreign Trade Policy (FTP) 2023–2028, which emphasizes export promotion through schemes like Advance Authorisation and the Export Promotion Capital Goods (EPCG) scheme. EXIM Bank complements these by providing tailored financing.
  • Impact: Enhances the competitiveness of Indian exporters, particularly MSMEs, by offering affordable financing for production, marketing, and equipment procurement. The Ubharte Sitaare Programme specifically targets MSMEs with export potential, providing loans and advisory services.
    
• Market Access Initiative (MAI) Scheme Support
  • Description: The MAI scheme, administered by the Department of Commerce, provides financial assistance for export promotion activities like trade fairs, buyer-seller meets, and market studies. EXIM Bank supports this by offering advisory services and financing to exporters participating in these activities.
  • Government Support: EXIM Bank collaborates with the government to provide priority funding access to Towns of Export Excellence (TEEs) designated under the MAI scheme, such as Mirzapur and Moradabad, to boost exports of handicrafts and textiles.
  • Impact: Helps exporters, especially in niche sectors like handicrafts and handlooms, access global markets through subsidized participation in international trade events.
    
• Emergency Credit Line Guarantee Scheme (ECLGS)
  • Description: Although primarily a COVID-19 relief measure, ECLGS was extended to export-oriented units to provide collateral-free loans for working capital and business continuity. EXIM Bank implemented this scheme for its borrowers.
  • Government Support: Backed by the Government of India and the National Credit Guarantee Trustee Company (NCGTC), ECLGS offered up to 20% additional credit based on outstanding loans as of February 29, 2020, with a four-year tenor and a 12-month principal moratorium.
  • Impact: Supported exporters facing liquidity challenges during the pandemic, ensuring continuity of operations and export commitments. The scheme was valid until September 30, 2021, for disbursements.
    
• Grassroots Initiative and Development Programme
  • Description: This program focuses on strengthening rural enterprises and micro-exporters by providing financing and capacity-building support to enhance their export capabilities.
  • Government Support: Aligned with the government’s Aatmanirbhar Bharat initiative, it promotes self-reliance and economic development at the grassroots level, with EXIM Bank acting as a catalyst.
  • Impact: Empowers rural entrepreneurs, particularly in sectors like handicrafts and food processing, to access international markets, contributing to inclusive economic growth.

Additional Support Mechanisms

• Promotional Activities: EXIM Bank organizes seminars, workshops, and trade fairs to raise awareness about export opportunities and government schemes, complementing initiatives like the MAI scheme.
• Collaborations with Multilateral Agencies: EXIM Bank facilitates Indian exporters’ participation in projects funded by agencies like the World Bank and Asian Development Bank, aligning with government efforts to integrate Indian businesses into global supply chains.
• Research and Advisory Services: Through its Export Advisory Services Group, EXIM Bank provides market intelligence and risk assessment, supporting exporters in leveraging government schemes effectively.

EXIM Bank’s Role in Risk Mitigation and Insurance

Protecting Exporters from Market Volatility and Non-Payment Risks

EXIM Bank plays a critical role in protecting exporters from various market risks, ensuring that their international transactions are secure. The bank offers a wide range of risk mitigation tools to shield exporters from currency fluctuations, political instability, and buyer defaults.

Overview of EXIM Bank’s Risk Mitigation Tools

• Hedging Options for Exporters: EXIM Bank provides exporters with hedging solutions to manage foreign exchange risks. This includes forward contracts and currency options to protect against adverse movements in exchange rates.
• Credit Risk Insurance: Offers coverage against payment defaults by international buyers, ensuring that exporters receive timely payments.
• Political Risk Insurance: Protects exporters against risks arising from political instability, war, or government intervention in the buyer’s country.

EXIM Bank’s risk mitigation tools empower exporters to expand their reach in global markets with confidence, knowing they are protected from potential financial losses.

How EXIM Bank Facilitates Access to Global Markets

Market Expansion Strategies for Indian Exporters

In today’s competitive global market, expanding exports is essential for business growth. EXIM Bank plays a crucial role in supporting Indian exporters by offering various tools and strategies for market expansion.

Export Market Research and Development

EXIM Bank helps exporters identify and enter new global markets by conducting in-depth market research. This research focuses on market demand, consumer preferences, and competitor analysis in different regions, enabling exporters to make informed decisions about where to focus their efforts.

• Identifying profitable markets: EXIM Bank provides insights into emerging markets and sectors with high growth potential.
• Market entry strategies: The bank assists exporters with understanding trade regulations, market entry barriers, and potential risks in foreign markets.

By leveraging EXIM Bank’s market research, exporters can target the right international markets and craft tailored strategies for successful market penetration.

Trade Promotion and Networking

EXIM Bank also facilitates exporters’ participation in international trade fairs, buyer-seller meets, and trade delegations, providing them with valuable networking opportunities.

• International trade fairs and exhibitions: These events allow exporters to showcase their products, connect with potential buyers, and build international partnerships.
• Buyer-seller meets: EXIM Bank organizes meetings where Indian exporters can interact directly with international buyers, helping them secure deals and expand their customer base.
• Trade delegations: EXIM Bank’s support for trade delegations helps exporters explore new opportunities, access government resources, and expand their market presence globally.

These trade promotion activities ensure that Indian exporters are visible on the global stage, leading to increased business opportunities and collaborations.

Digital Platforms and Tools for Exporters

In line with technological advancements, EXIM Bank has embraced digital platforms to help exporters expand globally. These platforms streamline the application process, offer real-time updates, and provide exporters with essential tools to manage their operations efficiently.

• Online application process: Exporters can apply for various financing schemes and government programs through EXIM Bank’s digital portals.
• Market intelligence tools: EXIM Bank offers digital resources to help exporters gather critical information about international markets, trends, and regulations.
• E-commerce platforms: The bank also supports exporters in leveraging e-commerce platforms for global sales, making it easier to reach international customers.

By integrating digital solutions into its services, EXIM Bank empowers exporters to scale globally with ease.

Key Eligibility Criteria for EXIM Bank’s Financing Schemes

Who Can Benefit from EXIM Bank’s Services?

EXIM Bank’s financing options are available to a wide range of exporters, from small businesses to large corporations. However, certain criteria must be met to access these services.

Criteria for Exporters to Avail of Financing Options

• Registered exporters: Exporters must have a valid IEC (Import Export Code) and must be engaged in the export of goods or services.
• Proven track record: Companies with a history of international trade and sound financial health are typically prioritized for financing.
• Business operations: The business must be registered under Indian laws and involved in the export of products or services from India.
  

Sectors Eligible for EXIM Bank Support

EXIM Bank offers financial products to a diverse range of sectors, including but not limited to:

• Textiles and garments
• Pharmaceuticals
• Engineering and machinery
• Agricultural exports
• Software and IT services

Application Process and Documentation Required

To apply for EXIM Bank’s financing, exporters need to submit essential documents such as:

• PAN card and GST registration
• Export contracts and invoices
• Financial statements and tax returns
• Other sector-specific documentation

EXIM Bank provides exporters with a step-by-step guide on the application process, ensuring the procedure is seamless and efficient.

EXIM Bank’s Exporter Support: Real-World Examples

Success Stories and Case Studies

EXIM Bank has supported numerous exporters across various industries, helping them scale their operations globally.

Case Study of a Textile Exporter Benefitting from EXIM Bank’s Financing Options

A textile exporter, after facing liquidity issues during a peak season, turned to EXIM Bank for pre-shipment credit. The financing enabled them to complete large international orders on time, boosting their revenues by 25%. This success story demonstrates how EXIM Bank’s financial products help exporters meet urgent capital requirements.

Example of a Pharmaceutical Company Leveraging EXIM Bank’s Government Schemes

A pharmaceutical exporter leveraged EXIM Bank’s MEIS scheme to reduce the cost of exporting medicines to new markets in Africa. By obtaining Duty Credit Scrips, the company effectively lowered production costs, resulting in increased competitiveness and higher market share.

How EXIM Bank Helped a Startup Scale Its Exports Through Financial Products and Services

A startup specializing in eco-friendly packaging solutions used EXIM Bank’s working capital finance and market research services to enter the European market. With EXIM Bank’s support, the startup successfully secured new partnerships, expanding its exports by over 40% in the first year.

How to Apply for EXIM Bank Financing and Support

Step-by-Step Guide to Accessing EXIM Bank’s Services

EXIM Bank’s financing solutions are available through a simple, user-friendly application process.

Registering with EXIM Bank:

• Create an Account: Exporters can begin by registering on EXIM Bank’s online portal.
• Complete KYC Process: Necessary documentation such as PAN card and GST registration must be submitted.
  

Choosing the Right Financing Scheme:

• Assess Your Needs: Exporters should identify whether they need short-term financing, working capital loans, or long-term project financing.
• Consult with EXIM Bank: EXIM Bank provides personalized consultation to help businesses choose the right scheme based on their financial needs and export goals.
  

Submitting Application Forms and Documents:

• Required Documentation: Exporters must submit documents such as export contracts, financial statements, and business registration details.
• Online Submission: Applications and documents can be uploaded through EXIM Bank’s online platform for faster processing.
  

Processing and Approval:

• Approval Timelines: The processing time varies depending on the financing scheme but is generally streamlined for quick access.
• Bank Review: EXIM Bank reviews the application based on the exporter’s credit history and the potential for international growth.
  

Disbursement and Repayment:

• Disbursement Process: Once approved, the loan is disbursed directly to the exporter’s account.
• Repayment Terms: EXIM Bank offers flexible repayment options, tailored to the financial capabilities of the exporter.