The BIZ Reporter
New Delhi, December 29 – In a strategic move to protect Indian exporters from the adverse impact of US tariffs and global economic uncertainty, state-run Export Credit Guarantee Corporation (ECGC) has upgraded the risk rankings of two dozen countries, substantially reducing insurance costs for exporters operating in these markets.
The upgradation, which covers 24 countries under short-term exports, aims to encourage Indian businesses—particularly micro and small enterprises (MSEs)—to diversify their export destinations and reduce over-dependence on tariff-affected markets.
Encouraging Market Diversification
“Amidst the global economic uncertainty and the likely trade disruption caused by the US tariff hike, ECGC has undertaken strategic review of country ratings to liberalize underwriting and encourage market diversification,” a commerce ministry official confirmed.
The initiative is designed to help exporters explore and develop alternative markets, including new entrants and emerging economies in Latin America, the Middle East, Africa, East Asia, and other regions, thereby reducing vulnerability to protectionist policies or restrictive market access.
Significant Upgrades Across Regions
According to the recent review, several countries have received notable upgrades in their risk classifications:
Major Upgrades (A2 to A1): Malaysia, Sweden, and Uruguay have been elevated to the lowest risk category, indicating minimal or “insignificant” risk.
Two-Notch Improvements: Bhutan, Panama, Peru, South Africa, and Trinidad and Tobago have moved from B1 to A2, while Turkey has jumped from B2 to A2.
Single-Notch Upgrades: Countries including Cape Verde, Honduras, Nicaragua, Nigeria, and Uganda have been upgraded from B2 to B1, while Kenya and Liberia moved from C1 to E2.
Other Notable Upgrades: El Salvador, Ghana, Sri Lanka, and Venezuela moved from C2 to C1, while a two-notch jump from D to C1 was seen for Zambia and Eritrea. Cameroon also improved from D to C2.
The ECGC risk classification system ranges from A1 (minimal risk) to D (very high risk), with higher ratings translating to lower insurance premiums for exporters.
Supporting Export Growth
The move is expected to significantly benefit India’s export sector, which witnessed subsidized exports worth Rs 2.55 lakh crore in 2024-25, reflecting 16.3% year-on-year growth from Rs 2.19 lakh crore in FY24.
ECGC’s total merchandised exports stood at $292 billion during April-November 2025, as exporters navigated the dual challenges of US tariff increases and global trade uncertainty.
“This would assist exporters, particularly MSEs, in de-risking their business and exploring new export destinations such as Latin America, the Middle East, Africa, East Asia, and other emerging markets,” the official added.
Strategic Importance
Officials emphasized that the review was conducted to assess countries with high potential for mutually beneficial trade relationships with India, as well as strategic partners and nations offering opportunities for trade growth.
“Post the upgradation in country ratings, the premium rates applicable for various ECGC policies will proportionally reduce, as the premium rates depend primarily on the country rating of the destination of goods,” an official explained.
The diversification strategy is particularly crucial as India seeks to maintain its export momentum of approximately 2.62% annualized growth in merchandise trade, while navigating an increasingly complex global trade landscape.
With this proactive measure, ECGC aims to position Indian exporters to capitalize on emerging opportunities across diverse markets, ensuring resilience and sustained growth despite global headwinds.
