Political risk cover for overseas projects soon

The government is considering extending political risk cover for both outward foreign direct investment and for exports.Stating this in resp...

The government is considering extending political risk cover for both outward foreign direct investment and for exports.

Stating this in response to a question at the CII annual national conference 2004 here on Thursday, commerce and industry minister Kamal Nath said the government was considering providing cover for political risk.

This is common practice in countries like the US where the government routinely covers all political risk, he added. Indian exporters are handicapped by the lack of such cover since the Export Credit and Guarantee Corporation (ECGC) covers only economic risk.

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Industry chambers said total foreign investment by Indian corporates was estimated at about $5 billion as on date.

With Indian companies like ONGC venturing into countries like Sudan and Angola, the need for political risk cover has increased. The government is fully alive to extending support to such companies. The scheme being mooted would see ECGC extend cover for both economic as well as political risk with the latter being under-written by the government.

Earlier, speaking of the huge potential of Indian exports, Kamal Nath said exports had been a powerful driver of growth for the economy.