Economics • Indian EconomyHard
The 'National Export Insurance Account (NEIA)' trust, established by the Government of India, is primarily designed to achieve which of the following objectives?
A. Provide risk insurance to foreign portfolio investors operating in Indian stock exchanges.
B. Facilitate project exports and medium-to-long-term export credits that are commercially non-viable for standard insurers.✓ Correct Answer
C. Cover foreign exchange fluctuation losses incurred by micro, small, and medium enterprises (MSMEs).
D. Provide direct cash subsidies to domestic manufacturers exporting agricultural commodities.
💡 Solution & Explanation
The National Export Insurance Account trust was established by the Government of India to facilitate project exports and medium-to-long-term export credits that face commercial viability challenges from standard export credit agencies. It provides credit cover for strategic, high-value infrastructure projects abroad that standard insurers find too risky to underwrite. This mechanism enhances the global competitiveness of Indian engineering and construction firms seeking international contracts. Trade promotion mechanisms are crucial areas in economic development syllabi.
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