ECGC's Larger Balance Sheet: What the Maximum Liability Expansion Unlocks for Project and Long-Credit Exporters

For years the standard answer from ECGC on large project deals was some version of "we are at capacity on this country" or "the exposure does not fit our current Maximum Liability". Brokers placing covers for capital-goods sellers and overseas EPC firms learned to route around it, splitting risk, leaning on Exim Bank, or telling the client the deal was simply uninsurable on the Indian side.

That constraint is being relaxed. The government approved a Rs 4,400 crore capital infusion into ECGC, spread over FY2021-22 to FY2025-26, with the stated intent of lifting ECGC's Maximum Liability (ML) toward Rs 2.03 lakh crore from roughly Rs 1 lakh crore. ML is the aggregate cap on the cover ECGC can carry at any time, so doubling it directly expands the size and number of risks the corporation can underwrite. Official estimates tied the infusion to underwriting capacity of around Rs 88,000 crore and additional supportable exports in the region of Rs 5.28 lakh crore over the period.

The same Cabinet decision approved an ECGC listing on the bourses, which remains in the pipeline. For brokers the listing matters less than the balance sheet. A larger ML means deals that bounced on capacity grounds before 2026 deserve a fresh look.

The practical message: if you parked a project-export or capital-goods file in 2023 or 2024 because ECGC could not carry it, re-test it now. The product set has not changed much. The room to write it has.

ECGC's medium and long-term (MLT) book is a different animal from the short-term receivable policies most exporters know. Short-term cover protects payments due within roughly 180 days on consumer and intermediate goods. MLT cover sits behind deferred-payment exports of capital goods, turnkey projects, construction works and technical services where the credit period runs for years.

The core building blocks a broker should know:

• MLT supplier's credit cover: protects the Indian exporter who himself extends deferred credit to the overseas buyer, against commercial and political default over the repayment tenure.
• Buyer's credit and line of credit cover: protects the lending bank (often Exim Bank or a commercial bank) that finances the overseas buyer or the buyer's bank directly, so the Indian exporter is paid upfront against a guaranteed loan.
• Overseas investment insurance: covers Indian equity or untied loans put into projects abroad against political perils such as expropriation, war and transfer restrictions.
• Construction works and services cover: for overseas civil works and consultancy contracts.

Tenures are long. MLT bank covers typically run up to around 10 years and can extend to 15. Overseas investment insurance is available up to 15 years and extendable toward 20 with a reduced insured amount in the later years. These are not annual policies you renew casually; they are structured at deal inception and live for the life of the credit.

Because the tenure is long and the ticket is large, a single MLT default can consume a meaningful slice of ML on its own. That is exactly why the capacity expansion is the live story for this product. The wordings, the exclusions and the claims mechanics were never the binding constraint for most good deals. Available capacity was.

The piece brokers most often underuse is the National Export Insurance Account (NEIA). The NEIA Trust exists to promote MLT and project exports of strategic and national importance by backing covers that ECGC and Exim Bank issue. The Cabinet decision that approved the ECGC infusion also continued NEIA with a Rs 1,650 crore grant-in-aid over the same five years.

NEIA matters because it carries its own large exposure budget on top of ECGC's commercial book. The permissible maximum liability for covers under NEIA has been set in the order of Rs 80,000 crore, with the larger share (around 75 percent) reserved for the Buyer's Credit-NEIA scheme and the balance for ECGC's MLT export-credit covers. So a project exporter is effectively reaching into two pools, ECGC's expanded ML and NEIA's dedicated capacity.

Buyer's Credit under NEIA (BC-NEIA) is the structure that wins competitive infrastructure and capital-goods deals in developing markets. Exim Bank lends to the overseas buyer or its bank, ECGC issues cover, and NEIA backs that cover, so the Indian exporter is paid on shipment or progress while the foreign buyer repays the loan over years. ECGC maintains a positive list of eligible countries (reported around 51) for which BC-NEIA can be structured.

For brokers, the action is to map a client's target markets against the BC-NEIA positive list early, before the commercial terms are frozen, so the financing structure is baked into the bid rather than retrofitted.

The capacity expansion is only useful if you act on it. Some segments deserve a deliberate re-test this year.

Capital-goods and machinery exporters selling on deferred terms to Africa, South and Southeast Asia, and the CIS region. These are classic MLT supplier's-credit cases. If a deal was structured cash-against-documents because cover was unavailable, the client may now be able to offer competitive credit terms backed by ECGC, which is often a commercial advantage worth more than the premium.

Overseas EPC and turnkey contractors in power, water, transport and industrial plant. These firms carry construction-works exposure plus retention and advance-payment risk. ECGC's MLT and works covers, layered with surety and political-risk thinking, can de-risk balance sheets that are currently stretched across multiple country exposures.

Project lenders and arrangers where Exim Bank or a commercial bank is funding the buyer. Buyer's-credit and line-of-credit cover is a bank product, so the broker conversation may run through the client's treasury or its financing bank rather than the export desk.

Indian investors putting equity into overseas projects, who should be looking at overseas investment insurance for political perils over a 15 to 20 year horizon.

A practical filter: any deal that was declined or shrunk on "ECGC capacity" grounds between roughly 2022 and 2024 is a candidate. So is any new bid into a developing market where deferred credit is the deciding factor. Re-pricing and re-underwriting take time, so start the conversation with ECGC's MLT desk well ahead of contract signature, not after the buyer has demanded terms you cannot yet support.

It also pays to revisit clients you previously sent to the commercial market or to Exim Bank alone. Some of those deals were split or de-scoped purely because the Indian state cover would not stretch. With more ML available, the same exporter may now secure a single coherent programme at a better blended cost, and a broker who proactively re-opens that file rather than waiting for the renewal cycle will look considerably sharper than one who does not.

MLT and buyer's-credit pricing does not look like short-term receivable cover. Premium is a function of country risk, buyer or borrower credit, tenure and the percentage of cover, and because tenures run for years the premium is material and usually paid upfront or built into the financing.

The percentage of cover is the first negotiation. ECGC typically does not cover 100 percent; an uncovered margin keeps the exporter or bank with skin in the game. For MLT supplier's credit the covered percentage on the commercial and political components is set deal by deal. Brokers should model the net exposure the client retains after cover, not just celebrate that a policy exists.

Tenure drives price non-linearly. A 10 year deferred-credit deal into a higher-risk country carries a very different rate from a 3 year one into an investment-grade buyer. Where overseas investment insurance extends toward 20 years, the insured amount steps down in the later years, so the protection thins exactly when some political risks may be highest. That tail needs to be explained to the client, not buried.

The single biggest pricing lever the broker controls is deal structure, not rate negotiation. Routing through BC-NEIA, splitting commercial and political cover, and getting the country onto the right scheme can change the all-in cost and the availability of cover far more than haggling over basis points.

Finally, understand the interaction with bank financing. On buyer's-credit deals the premium is frequently absorbed into the loan and recovered from the buyer, so the Indian exporter sees a clean upfront payment. Make sure the client's commercial team prices the financing cost into the bid, because a tender that ignores the cost of the cover can win the contract and lose the margin.

MLT claims are slow, document-heavy and political in a way short-term claims rarely are. A buyer default years into a deferred-credit deal triggers a process that depends entirely on how cleanly the deal was documented at the start. The broker's real claims work happens at inception, not at default.

Get these right before the cover incepts:

• Insurable interest and the chain of cover: on buyer's-credit structures the bank holds the cover, so confirm whether your client (the exporter) is paid out of the financing and steps away, or retains residual exposure. The party with the claim must be the party with the loss.
• Documentation of shipment and acceptance: progress certificates, acceptance of goods, and evidence of the underlying contract terms are the spine of any later claim. Missing milestone documents are the most common reason MLT recoveries stall.
• Country-event triggers: political cover responds to defined events such as transfer restrictions, moratoria, war and expropriation. The wording's definitions decide whether a payment delay is a covered political event or an uncovered commercial dispute. Read them.
• Indemnity and waiting periods: MLT covers carry waiting periods before ECGC pays, and the indemnity follows the covered percentage. The client must be able to fund the gap.

After a claim, recovery and subrogation can run for years across foreign jurisdictions. ECGC and the exporter share recoveries in proportion to the cover, and the client should expect to cooperate with collection efforts long after the indemnity is paid.

For a broker, the differentiator is treating an MLT cover as a multi-year relationship. Diarise the credit tenure, watch the country and buyer for early stress, and keep the documentation file complete and current. A default that surfaces with clean records settles; one that surfaces with gaps becomes a dispute.

ECGC's expanded ML does not make it the only answer. For MLT and project risk the broker is choosing between, and often combining, several instruments, and the right structure usually blends them.

Commercial trade-credit and political-risk insurers (the private market and Lloyd's) compete on flexibility, speed and appetite for risks ECGC may not prioritise. They can be quicker on wording negotiation and may take country or buyer risk that sits outside ECGC's strategic focus. They are also more expensive on the hardest political risks and may not match ECGC's tenure or its state-backed credibility on sovereign-linked deals.

Multilateral and bilateral options (MIGA-style political-risk cover, other export credit agencies on co-financed deals) come into play on very large or multi-sourced projects. On a project with Indian and non-Indian content, more than one ECA may share the credit.

Where ECGC and NEIA win is on Indian-content project exports into developing markets where state backing, long tenure and the BC-NEIA financing structure are decisive. Where the commercial market wins is on speed, manuscript wording and appetite for the awkward risk.

The broker's value is in the blend. A single large EPC contract abroad might carry ECGC MLT cover on the deferred export, surety on the bonds, a private political-risk layer on the uncovered margin, and overseas investment insurance on any equity stake. Presenting that as one coherent risk-transfer programme, rather than four disconnected policies, is the work. The 2026 capacity expansion simply makes the ECGC layer of that stack far more available than it was, which is reason enough to rebuild the programme for clients you had previously routed around it.