The Federation of Freight Forwarders Associations in India (FFFAI) hosted an insightful Webinar on “Payment Risks in Export Transactions and Role of ECGC” for its members on April 29, 2022.
The Webinar was focused on the following aspects: 1. Common payment terms in export transactions, 2. Commercial & Political Risks associated with these payments, 3. Information on ECGC services, 4. Loss minimization steps to be taken in case of default, 5. Claim documentation and 6. Insurance coverage on Cargo and Freight on cargo being re-imported.
Moderated by Mr R Rajesh Kumar from FFFAI, the webinar was addressed by Mr Shankar Shinde, Chairman, FFFAI and other speakers/panellists from Export Credit Guarantee Corporation of India Ltd (CGC), Formerly Export Credit Guarantee Corporation of India Ltd., which is wholly owned by Government of India.
Welcoming the panellists from ECGC and FFFAI members/participants Mr Shinde highlighted the important role being played by ECGC. “The perception about ECGC that it is only for the importers or exporters and not for the logistics service providers is completely wrong. The perception needs to be changed. We need to educate our clients, i.e exporters and importers, about the importance of being part of ECGC for resolving any issues pertaining to financial transaction/payment etc to secure their as well as freight forwarders/customs brokers/logistics service providers interests,” emphasised the FFFAI Chairman.
Speaking on the occasion Mr Anand Singh, GM and CMO, ECGC, acknowledged the great contribution of FFFAI members in achieving the $400 billion export target last year. According to him, both growth of export and realisation of payment are equally important. ECGC is covering these aspects and making payment cycle flawless to protect bankers and the trade people. For this, insurance coverage is in place through ECGC. He, however, pointed out that for smooth payment realisation under ECGC coverage, written contract is must, between buyers and sellers or bankers and borrowers.
In his presentation Mr Saket Kumar elaborated on the role & activities of ECGC and major issues related to payment pertaining to different areas like default of banks, discrepancies, political issues, non-acceptance, insolvency, etc. According to him, ECGS’s insurance coverage takes care of all these aspects. Mr Kumar also elaborated on other remedial measures from ECGC against payment issues including services offered by dept collection agencies and legal actions.
The webinar was a purposeful event with some very interesting observations and questions raised by FFFAI member participants from 28 Member associations spreading over across the country. Many of the questions were related to risk factors due to lack of appropriate documentary evidences. Mr Anand Singh made it clear that ECGC takes care of it as per the available documents and IE Code (Importers and Exporters Code).
Mr Shankar Shinde observed that to resolve the issues related to documentation part of transaction there is a need of detailed case to case analysis supported by adequate write ups and FFFAI and ECGC would take it forward.
The webinar was concluded with vote of thanks from Mr Vinod Sharma, Hony. Secretary, FFFAI to all Office Bearers of FFFAI, panellists and participants for attending this very crucial webinar regarding payment issues, which is vital for survival of the freight customs brokers and freight forwarders in particular. He welcomed the initiatives of ECGC to mitigate the payment issues and requested more interactions on this subject in future as well.