NIRVIK Scheme: Eligibility, Documents, Features & Benefits

India’s exports contracted for the fifth month in a row by 1.8% in December 2019. Owing to this, the exporters have raised concerns over credit availability. Considering this, the Finance Minister proposed the NIRVIK scheme, also known as Export Credit Insurance Scheme (ECIS), while presenting the Budget 2021-21.

If you plan to apply for this scheme, you might want to consider its features, eligibility, required documents, and other vital details. In that context, you can go through the following piece.

What Is NIRVIK Scheme?

To understand this scheme better, you must first learn about the NIRVIK full form, which is Niryat Rin Vikas Yojana. The Commerce Ministry of India is preparing this scheme, and the launch date is yet to be announced. Introduced by the Export Credit Guarantee Corporation of India, this Central Government scheme focuses on boosting fund availability for small exporters.

Now let’s take a quick look at some of the objectives of this scheme -

It offers a high insurance cover to exporters so that they can expand their business.
The scheme also gives small exporters a chance to reduce their policy premium.
It also provides a 60% credit guarantee to exporters in case of loss.
Niryat Rin Vikas Yojana’s main objective is high credit disbursement for small exporters to help them export at a higher level.
This scheme comes with a simplified claim settlement procedure that makes it easier for exporters to work.

As of December-April 2019-20, the exports reduced by 1.96% and the imports by 8.9%. This led to a trade deficit of around $118.10 billion. Therefore, the introduction of this scheme is a need of the hour. In the following section, you will find details of the number of policies available under this scheme.

Who Is Eligible to Apply for NIRVIK Scheme?

Before applying for this, individuals might want to consider certain eligibility as follows -

Only small exporters are eligible to apply and obtain benefits under this central-sponsored scheme.
Indian citizens owning an export business can consider applying for this scheme.
Individuals with a bank account limit below the ₹80 crore mark will be able to avail low premium rate under this insurance scheme.

How to Apply for NIRVIK Scheme?

The date of the launch of the NIRVIK Scheme is yet to be announced. As such, details on how exporters can apply and get the benefits of this scheme is not known yet.

Now that you know about the NIRVIK Scheme eligibility, you might also want to know about the documents required for a hassle-free application in future.

What Are the Documents Required for NIRVIK Enrolment?

Here is a list of documents you need to furnish if you opt for this scheme -

Business Registration Documents: Irrespective of the type of export agency, you need to provide all official documents to ensure you are an owner of a legitimate business.
GST Certificate: Small exporters must obtain a GST certificate from the Goods and Services Tax department for a successful NIRVIK registration.
Business PAN Card: Without a PAN card in the name of the organisation, an exporter would not be able to apply for this scheme.
Identity Proof: Whether there’s a partnership firm or a single individual owner of an export company, they must remember to submit identity proof such as Aadhaar during application.
Bank Loan Certificates: In case you have secured a bank loan, you must submit the loan-related documents for verification.
Insurance Documents: Potential small exporters need to submit all insurance-related documents to claim benefits under this scheme.

What Are the Features of the NIRVIK Scheme?

The primary motive behind the launch of this scheme is to boost the export and other business sectors. Given below are some essential features of this scheme you might consider before proceeding to its application -

Seamless Loan Application: Under this scheme, you can apply for loans effortlessly from reputed financial institutions. It also makes sure that the business credit application mode is simple.
Competitive Interest Rates: Small exporters can secure business loans at a 7.6% interest rate per annum.
Coverage Interest and Principal Amounts: This government-sponsored scheme makes it possible for small exporters to receive 90% coverage on both principal and interest amounts.
Reduced Insurance Premium Rates: The insurance premium under this scheme has been slashed from 0.72% to 0.60%.
Tenure: As per the minister, the scheme will run for 5 successive years once launched.

NIRVIK scheme also boosts loan availability and ease the lending process for several SMEs, MSMEs, and Gems, Jewellery and Diamonds (GJD) sectors. The Government of India (GOI) proposed this scheme primarily to increase export production and offer guaranteed insurance cover for pre-and post-shipment credit. Considering this, let’s take a look at some of the lucrative benefits of this scheme.

What Are the Benefits of the NIRVIK Scheme?

Here are the benefits of the Niryat Rin Vikas Yojana scheme one should be aware of -

It reduces credit costs due to capital relief.
Exporters can get easy access to funds under this scheme.
It comes with more liquidity due to instant claim settlements and continuous availability of working capital for the production of export.
This scheme makes it possible for Indian exports to be competitive in national and international markets.
It offers reduced insurance costs and tax reimbursements in order to enhance productivity and credit loans.
The scheme ensures the foreign and domestic exchange rates remain less than 4% and 8%.
Exporters can expand their small-scale businesses to large-scale under this scheme.
The scheme minimises the risk of non-payments.

Now that you know everything about the NIRVIK scheme, you might find it easier to apply for this scheme after its launch.

Frequently Asked Questions

✓ Apart from exporters, GJD sectors and the likes, who all are covered under this insurance scheme?

The coverage benefits under this scheme are also applicable to banks and customer banks. In case a company has projected loss, a refund of 50% of the loan amount is available for banks within 30 days after an official complaint.

✓ What do you mean by export credit?

Export credits are government-sponsored financial support that assists foreign buyers to purchase goods from national exporters. The Export Credit Guarantee Corporation of India is a government-owned export provider in India.

✓ What are the benefits obtained by enterprises under the NIRVIK scheme?

Enterprises can get a 90% refund in case of projected losses.