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NATIONAL LAW UNIVERSITY ODISHA

BANKING LAW PROJECT


SEMESTER VI

EXIM BANK AND ITS ROLE IN INTERNATIONAL TRADE

COURSE INSTRUCTOR

PROF. (DR.) DOLLY JABBAL

MS. TULIP SUMAN

NAME OF STUDENTS

DEVESH TRIPATHI (14/BBA /013)

HEMANT DHILLON (14/BBA/019)


ABSTRACT

The EXIM Bank has been a vital factor for Indias increased capacity of exports. The Bank
has majorly contributed in enabling India in making a name for itself in todays era of
Globalization and Privatization. It has greatly financed, promoted and facilitated International
Trade by lending Export and Import Credit, various Value-Added Services in terms of
providing the interested parties with relevant consultation and advice about their ventures.

Additionally, there are blaring examples which show how the EXIM Bank has garnered a lot
of profits for India. Where the estimated turnover was Rs. 1500 crores, the bank facilitated
India to garner about Rs. 1506 crores, by promoting Indian Joint Ventures in Russia. Even
Nepal has been helped a lot by the EXIM Bank in the form of soft loans.

This paper will focus on how the EXIM Bank has been instrumental in promoting Indias
International Trade highlighting the importance of organized exports and imports in the 21 st
century.

EXIM Bank and Its Role in International Trade Page 1


TABLE OF CONTENTS

Abstract ----------------------------------------------------------------------------------------------------- 0

Introduction ------------------------------------------------------------------------------------------------ 4

I. A Brief History ----------------------------------------------------------------------------------- 4

II. Research Methodology -------------------------------------------------------------------------- 4

A. Scope and Limitations ---------------------------------------------------------------------- 4

B. Research Questions -------------------------------------------------------------------------- 4

1. What is the Operational Philosophy of the EXIM Bank of India? ------------------ 4

2. How does the EXIM Bank help various Small and Medium sized Enterprises and
other Rural Regions to compete in this era of Globalization? ----------------------------- 4

3. How does the EXIM Bank Finance, Promote and Facilitate International Trade,
especially Export Trade? ------------------------------------------------------------------------ 4

4. Has the EXIM Bank been successful in its endeavours? ----------------------------- 4

C. Sources ----------------------------------------------------------------------------------------- 5

Chapter 1: An Overview of the EXIM Bank of India- Management, Structure & Source of
Capital------------------------------------------------------------------------------------------------------- 6

I. Management of the EXIM Bank of India ----------------------------------------------------- 6

II. Structure of the EXIM Bank of India --------------------------------------------------------- 6

III. Source of Capital of the EXIM Bank ------------------------------------------------------- 7

Chapter 2: Operational Philosophy of the EXIM Bank of India------------------------------------ 7

Chapter 3: EXIM Banks Role in Fostering International Trade ----------------------------------- 8

I. Different Welfare Activities of the EXIM Bank --------------------------------------------- 8

A. Loans granted by the Bank to Small and Medium Scale Units ------------------------- 8

B. The Rural Initiatives Undertaken by the Bank -------------------------------------------- 9

C. Financing Various Films --------------------------------------------------------------------- 9

II. The Role of the Bank in International Trade ------------------------------------------------10

EXIM Bank and Its Role in International Trade Page 2


A. Export Credit ----------------------------------------------------------------------------------10

1. Providing Financial Assistance through different Programs ------------------------11

a. Loans Advanced to Indian Companies --------------------------------------------11

a.1. Deferred Payment Facilities and Direct Financial Assistance ---------------11

a.2. Pre-shipment Credit----------------------------------------------------------------11

a.3. Term-Loans for Export Production ----------------------------------------------12

a.4. Overseas Investment Finance ----------------------------------------------------12

a.5. Suppliers Credit -------------------------------------------------------------------12

a.6. Project Exporters -------------------------------------------------------------------12

a.7. People who Export Consultancy and Technological Services ---------------12

b. Loans granted to Foreign Companies, Governments and other Financial


Institutions-------------------------------------------------------------------------------------12

c. Loans to Commercial Banks in India ----------------------------------------------13

2. Value Added Business and Services ---------------------------------------------------13

3. Research, Analysis and Development --------------------------------------------------13

B. Import Credit ----------------------------------------------------------------------------------13

Chapter 4: An Analysis of the Success of the EXIM Bank of India through two brief Case
Studies -----------------------------------------------------------------------------------------------------14

I. Indo-Russia Trade Relations-------------------------------------------------------------------14

II. Indo-Nepal Trade Relations -------------------------------------------------------------------14

Conclusion-------------------------------------------------------------------------------------------------15

EXIM Bank and Its Role in International Trade Page 3


INTRODUCTION

I. A BRIEF HISTORY

The EXIM Bank of India was set up by the Indian Parliament under the Export-Import Bank
of India Act 1981. The bank, which is completely owned by the Govt. of India, commenced
its operations in 1982.

The preamble to the Act states that the EXIM Bank is the principal financial institution for
co-ordinating the working of institutions engaged in financing export and import of goods
and services with a view to promoting the countrys international trade and for matters
connected therewith or incidental thereto.1 It is indeed an imperative tool in promoting
globalization through smoother facilitation of imports and increased exports, which has
resulted in promotion of various types of cross border trade and lucrative investments.

The Bank had commenced its operations as a propagator of export credit. However, over the
period, it has evolved into a principal financial institution that aids various industries,
specially the Small and Medium enterprises to globalize successfully. This paper would
substantially cover various such related aspects, highlighting the commendable role the
EXIM Bank of India has played to propel India into the global forum.

II. RESEARCH METHODOLOGY

A. SCOPE AND LIMITATIONS

This paper shall be dealing with a careful analysis of the extent of success of the EXIM Bank
of India in carrying out its various functions to promote Indias International trade, with
special focus on Export Credit extended by the EXIM Bank of India.

B. RESEARCH QUESTIONS
1. What is the Operational Philosophy of the EXIM Bank of India?
2. How does the EXIM Bank help various Small and Medium sized Enterprises and
other Rural Regions to compete in this era of Globalization?
3. How does the EXIM Bank Finance, Promote and Facilitate International Trade,
especially Export Trade?
4. Has the EXIM Bank been successful in its endeavours?

1
Export Import Bank of India Act, 1981, Preamble.

EXIM Bank and Its Role in International Trade Page 4


C. SOURCES

This paper involves a doctrinal research by making use of the primary sources such as Case
Laws and secondary sources such as various World Journals, news-paper reports,
Government websites etc. This paper is an analytical one, through which the sourced data has
been analysed, to ascertain to what extent the EXIM Bank has been successful in promoting
Indias International Trade interest as the global forum.

EXIM Bank and Its Role in International Trade Page 5


CHAPTER 1: AN OVERVIEW OF THE EXIM BANK OF INDIA-

MANAGEMENT, STRUCTURE & SOURCE OF CAPITAL

Since the day of its inception, the EXIM Bank of India has witnessed extremely qualified
individuals being responsible for the smooth functioning of the bank.2

I. MANAGEMENT OF THE EXIM BANK OF INDIA

Professionals with vast experience in banking have headed this principal institution
responsible for regulation of International Trade in India. Few of such luminaries from the
financial field include Shri R.C. Shah, who was the first Chairman and M.D. of the bank. He
had envisioned the institution to be unique organization, having a non-hierarchical culture.
He wanted the people to have a multi-disciplinary approach towards solving problems and be
adept with the latest improvements in technology.3 Other people like Kalyan Banerji, Ms.
Tarjani Vakil, Shri Y.B. Desai, Shri T.C. Venkat Subramanian, Smt. Ravneet Kaur, Shri
T.C.A. Ranganathan and Shri Anurag Jain have headed the institution have taken it to new
heights of glory. Shri Yaduvendra Mathur is the current MD and Chairman of the bank. He
has had worked as the Assistant to the Executive Director of the African Development Bank,
representing India, Norway, Denmark, Sweden, Finland and Switzerland in the process. As
the head of the EXIM Bank, he has played an integral role in fostering lucrative business
opportunities for companies of Indian origin in the African continent, by taking assistance of
Technical Co-operation Agreements.4

II. STRUCTURE OF THE EXIM BANK OF INDIA

An impeccable leader at the head of an institution is imperative for the success of that
establishment. However, an efficient structure for the institution is equally important. The
secret behind the smooth functioning of the EXIM bank and the steady increase in our
countrys GDP is the excellent group of Board of Directors which runs the bank. There can
be a total of 16 directors in the EXIM Bank as per the Act, which includes the MD &
Chairman of the bank, 5 top-level Government officials, 3 directors from scheduled
commercial banks and 4 from are experts in the field of trade and industry. The remaining
three directors are nominated by the Reserve Bank of India, the Industrial Development Bank
of India and Export Credit Guarantee Corporation of India Ltd.

2
http://business.mapsofindia.com/banks-in-india/export-import-bank-of-india.html.
3
http://www.eximbankindia.in/organization.
4
http://financialservices.gov.in/banking/exim.asp

EXIM Bank and Its Role in International Trade Page 6


III. SOURCE OF CAPITAL OF THE EXIM BANK

Section 4 of the EXIM Bank of India Act, 19815 had designated the authorised capital of the
Bank at Rs. 200 crores. However, with time, the amount increased and in the financial year
2007-08, it was risen to Rs. 2000 crore.6 The Central Government of India is supposed to
wholly subscribe to the issued capital.7 The paid up share capital of the bank stood at Rs.
5,059 crores and its net worth could be estimated to be approximately Rs. 9,902 crores on
March 31st, 2015. As a matter of fact, in the next financial year, there are estimations that it
will go upto Rs. 13,000 crores.8The amount of share capital received from the Government of
India during the financial year was Rs. 1,300 crores.9

There are other ways too in which the Bank can raise its resources. These include issuance
and sale of bonds and debentures, by borrowing from the RBI and other established and
approved financial institutions in India. The Bank is also allowed to accept deposits and loans
in foreign currency, from any foreign entity, provided the Government of India has consented
to it previously.

CHAPTER 2: OPERATIONAL PHILOSOPHY OF THE EXIM BANK

OF INDIA

The main aim of the EXIM Bank is to promote, finance and facilitate credit in the arena of
International Trade.10 All its actions are aimed at providing financial assistance to entities
who export software, capital, consultancy services, manufactured goods, overseas joint
ventures etc.11

In this procedure, various facilities can be granted to the project exporters. Deferred payment
facilities can be given at a post-shipment stage to appropriate goods and services.12 The Bank
is renowned for providing guarantee support and multi-currency financing facility to such

5
Export Import Bank of India Act, 1981, 4.
6
http://profit.ndtv.com/news/market/article-exim-banks-capital-to-increase-five-fold-to-rs-10-000-cr-154112.
7
M L Tannan, Tannans Banking Law and Practice in India, 23rd edition, (Lexis Nexis Butterworths Wadhwa
Nagpur Publishers, 23rd edn.) 151.
8
http://www.dnaindia.com/money/report-export-import-bank-of-india-plans-to-raise-rs-13000-crore-in-next-
fiscal-2066464.
9
http://financialservices.gov.in/banking/exim.asp.
10
http://www.eximbankindia.in/lines-of-credit.
11
http://www.yourarticlelibrary.com/banking/export-import-bank-of-india-objectives-and-functions/24815/.
12
www.iibf.org.in/documents/the-export-import-bank-of-india-iibf.docx.

EXIM Bank and Its Role in International Trade Page 7


project exporters.13

Before we move forward to discuss the ways in which the Bank fosters International Trade,
one of the most pertinent questions which needs to be answered here is, what are the Major
Programs of the EXIM Bank?

The different financial programmes which assist thousands of people all around the world
include the following:14

1. Different types of Export Credits


2. Providing Financial assistance to Export Oriented Units
3. Overseas Investment Finance
4. Lines of Credit facilities
5. Proving financial assistance to Small and Medium Enterprises and Agricultural Units
6. Providing finances for Films
7. Taking up Rural Initiatives, &
8. Providing Export Services.

CHAPTER 3: EXIM BANKS ROLE IN FOSTERING

INTERNATIONAL TRADE

There can be two heads under which the activities of the Bank can be summarized, for the
purposes of this Paper. They are International Trade on one hand, and other Welfare
Activities of the Bank on the other.

I. DIFFERENT WELFARE ACTIVITIES OF THE EXIM BANK

As has been already observed, the Bank takes up rural initiatives, grants loans to small and
medium scale units, finances films etc.15

A. LOANS GRANTED BY THE BANK TO SMALL AND MEDIUM SCALE UNITS

The discretion to provide assistance to any industry lies completely with the EXIM Bank of
India, which also decides the quantum of the loans and financial assistance to be extended. 16

13
Supra note 7.
14
Ibid.
15
http://commerce.nic.in/trade/international_tpp_cis_8.asp.
16
Darshak A. Desai, Cost of quality in small- and medium-sized enterprises: Case of an Indian Engineering
Company, Production Planning & Control: The Management of Operation (19) 1 (2008).

EXIM Bank and Its Role in International Trade Page 8


One of the influencing factors in the decision which the Bank makes is the financial status
and the credit worthiness of the borrower.17 A leading case with respect to the quantum of
loans which can be advanced was the case of Griffan Masih v. Punjab National Bank.18 This
case clearly stated how if the loan had been demanded for a particular sum of money, but the
Project Report produced by the borrower showed that the actual expenses were loan than the
requested amount of the loan, then the applicant would not be entitled to claim the whole loan
amount. Additionally, the way in which the Bank is helping the various emerging sectors like
the Handicrafts Sector19 besides the assisting the industrial sector.20

B. THE RURAL INITIATIVES UNDERTAKEN BY THE BANK

The Bank believes that providing credit facilities at the grass root level is a must to eradicate
poverty and foster development in the country.21 There exists an intense connection between
poverty alleviation and fostering increase in rural exports.22 Thus the Bank considers it to be
imperative to lend credit to these rural people, to make them realize the difference they could
bring about in the society.23

C. FINANCING VARIOUS FILMS

The EXIM Bank has financed some of the leading films in India which include movies like
Bunty Aur Babli, Dhoom, Dhoom 2, Don- the Chase Begins Again, Fanaa, Cheeni Kum,
Hum Tum etc. The Bank has sanctioned loans to the tune of Rs. 33.15 crores to the Indian
Film Industry and a lot of these films have witnessed immense success.24

Besides these, a lot of excellent initiatives have been taken by the EXIM Bank of India, in
taking steps to foster third party payments for export-import transaction. This was a recent
initiative undertaken by the Reserve Bank of India.25 The RBI had also made norms to ease
gold dore imports and the EXIM Bank worked in consonance with the RBI to facilitate sooth

17
R. Mohanraj, L. Manivannan, Problems Faced by Indian Poultry Farm Exporters and Role of Exim Bank,
Indian Journal of Managemnet (3)12.
18
Griffan Masih v. Punjab National Bank (2006) 4 CPJ 16 (PB).
19
Maureen Liebl and Tirthankar Roy, Handmade in India: Preliminary Analysis of Crafts Producers and Crafts
Production, EPW (38) 51/52 (Jan 27, 2003).
20
Sunil Mani, Economic Liberalisation and the Industrial Sector, EPW (30) 21 (May 27, 1995).
21
http://profit.ndtv.com/news/industries/article-exporters-importers-may-get-to-write-covered-options-775393.
22
Sanjib K. Dutta, Enhancing competitiveness of India Inc.: Creating linkages between organizational and
national competitiveness, International Journal of Social Economics (34)9
23
Dogra, Rural Marketing, Tata McGraw Hill Publishing CO. Ltd., Page 291.
24
http://economictimes.indiatimes.com/industry/banking/finance/banking/export-import-bank-of-india-facing-
bad-loan-risk-in-four countries/articleshow/47607744.cms.
25
http://profit.ndtv.com/news/economy/article-rbi-allows-third-party-payments-for-export-import-transactions-
371729.

EXIM Bank and Its Role in International Trade Page 9


transaction in that field.26

II. THE ROLE OF THE BANK IN INTERNATIONAL TRADE

This segment shall be discussing one of the most vital elements of the Paper, wherein the role
of the Bank in fostering International Trade shall be examined in great detail. The following
flowchart gives an over-view of the way in which the Bank acts to foster International
Trade:27

EXIM Bank

International Trade

Financing Promoting Facilitating

Modalities

Different Financing Value Added Services Researching, Analysis


programs and Business and Development

Thus, now we shall discuss in details the modalities in which the Bank facilitates
International Trade by concentrating on Export and Import Credit.

A. EXPORT CREDIT

26
http://profit.ndtv.com/news/industries/article-rbi-eases-norms-for-gold-dore-imports-376354.
27
http://www.eximbankindia.in/sites/default/files/corporatepresentation.pdf.

EXIM Bank and Its Role in International Trade Page 10


The different stages of an Export Business Cycle can be charted as follows:

The Bank generally provides assistance to the borrowers in each of the stages of the Export
Business Cycle, in the following ways:28

1. Providing Financial Assistance through different Programs

The financing programs of the EXIM Bank concentrate mostly on Export and Import Credit.
The Bank thus extends its credit facilities to Indian Companies, Foreign Companies and
Financial Institutions and to Commercial Banks in India.29

a. Loans Advanced to Indian Companies

A variety of modes of financial assistance is provided to different Indian Companies, by the


Bank for concluding various deemed exports30 and overseas contracts, successfully.

a.1. Deferred Payment Facilities and Direct Financial Assistance

The Indian exporters who deal in eligible goods and services are given opportunities through
which they can extend deferred credit facilities to their overseas buyers.

a.2. Pre-shipment Credit

The companies who are engaged in export contracts which have a cycle time of more than 6
months, get financial assistance from the EXIM Bank of India for different purposes.

28
Parvata Raj Prabhu, A Study On Role Of Exim Bank In Export Trade, Asia Pacific Journal of Research, July
2013, Volume: 1 Issue: 7.
29
http://www.financialexpress.com/article/industry/companies/india-incs-overseas-forays-to-get-exim-bank-
boost/137065/.
30
Kalyan M. Raipuria and Purnima M. Gupta, Policy Frame for Support to Deemed Exports, EPW (27) 6 (Feb.
8th, 1992).

EXIM Bank and Its Role in International Trade Page 11


a.3. Term-Loans for Export Production

The Bank also provides term payment guarantees or deferred payment guarantees upto evne
100%.

a.4. Overseas Investment Finance

If an Indian Company opens a joint venture overseas and it requires funds for buying equity
shares, so that they can have ownership rights over the joint venture, the EXIM Bank
provides funds for the same.

a.5. Suppliers Credit

The Indian exporters can extend term credit to the importers of eligible goods at a post-
shipment stage.31

a.6. Project Exporters

The Project exporters of India incur various costs in the Indian rupee which involve the cost
of acquisition and mobilization of materials, equipment, personnel etc. EXIM Bank extends
loans to them to meet the need of such situations.

a.7. People who Export Consultancy and Technological Services

The EXIM Bank has provisions for providing assistance to those Indians who have a business
of exporting consultancy and technological services. This enables them to extend credit to
overseas importers.

b. Loans granted to Foreign Companies, Governments32 and other Financial


Institutions33

The EXIM Bank is so diverse in its functions that besides helping the Indians in shining in
the field of Exports, the Bank grants Overseas Buyers Credit to the foreign entities, when
34
they are importing eligible goods and services, on deferred payment. Additionally, if
various Foreign Financial Institutions and Governmental Agencies want to import goods
from India, the EXIM Bank extends Lines of Credit to them. 35

31
Supra note 7 at 151.
32
R. Nagaraj, Indian Investments Abroad: What Explains the Boom?, EPW (41) 46 (Nov. 18-24, 2006).
33
http://www.business-standard.com/article/economy-policy/potential-of-india-africa-bilateral-trade-manifold-
exim-bank-115102800720_1.html.
34
http://profit.ndtv.com/news/market/article-exim-bank-to-provide-208-million-loan-to-congo-and-maldives-
294857- PTI.
35
http://indianexpress.com/article/india/india-news-india/exim-banks-red-flag-why-most-africa-deals-go-to-so-
few-firms/.

EXIM Bank and Its Role in International Trade Page 12


c. Loans to Commercial Banks in India

With respect to the Indian Commercial Banks, the EXIM Bank helps them by re-discounting
the export bills, refinancing of export credit and guaranteeing of obligations. The Indian
Commercial Banks, who deal in foreign exchange can discount their short-term export bills
with the Bank, provided there is an unexpired issuance period of 90 days. 100 % refinance of
deferred payment loans can be obtained by various authorized dealers in foreign exchange
which had been extended for the export of Indian goods which are deemed eligible.36 At
times, certain Indian Companies require export contracts and for the completion of overseas
constructions and turnkey projects. The EXIM Bank at those times, works with the Indian
Commercial Banks, providing them guarantees for such purposes.37

2. Value Added Business and Services

Providing credit facilities to interested parties is one of the many things that the EXIM Bank
can take pride in doing.38 Just giving money is never enough. At times, advice with respect to
the correct strategy of business can be a game changer. Thus, the Bank provides the parties
with advisory services, information and knowledge building endeavours.

3. Research, Analysis and Development

The EXIM Bank always infuses positive spirit and energy into the lives of different business
entities which are looking for overseas investment. It encourages these units to spend a
substantial portion of their investment in Research and Development activities. This would
not only ensure the enhancement of knowledge on the part of the investors,39 but would make
them eligible to get various Intellectual Property Rights, which would further their export
capabilities.40

B. IMPORT CREDIT

It has been opined that though the basic duty of Export Credit Agencies like the EXIM Bank
of India mainly lies in encouraging exports, it has been found that the Bank provides a lot of
facilities to finance imports, i.e., import credits.41

36
Dr. Soheli Ghose & Mr. Sumit Thakur, An Analysis Of The Growth Of Exim Bank As Indias Premier Export
Financing Institution, (II)1 (June 2015).
37
Supra note 26.
38
http://www.eximbankindia.in/export-advisory-services.
39
EPW Research Foundation, Credit Policy: Beyond Expansionary Signals, EPW (37) 11 (Mar. 16-22, 2002).
40
Anonymous, Southern African Development Community (SADC): A Study of Indias Trade and Investment
Potential, Exim Bank-Research Brief No. 66 (March 2012).
41
Report on Task Force on Project Exports. This report had been submitted to the Office of the Prime Minister

EXIM Bank and Its Role in International Trade Page 13


CHAPTER 4: AN ANALYSIS OF THE SUCCESS OF THE EXIM BANK

OF INDIA THROUGH TWO BRIEF CASE STUDIES

I. INDO-RUSSIA TRADE RELATIONS

The Indo-Russia trade relations boomed in 1995, the turn-over for which was Rs. 1,506
crores, as opposed to the target turn-over of Rs. 1500 crores.42 However, there were and still
are certain complexities which the EXIM Bank has been extremely instrumental in sorting
out. A simple example of the same is the Bank earmarking about 1 million dollars by
promoting Indian Joint ventures in Russia.43

II. INDO-NEPAL TRADE RELATIONS

India advances a lot of credit facilities to Nepal in the form of soft-loans.44 However, there
exists a two-way informal trade between the two countries.4546 But the Bank has been
proactive in mitigating the harmful effects of this informal trade by promoting formal trade.
However, this is one area where the Bank has to work even harder to promote the
environment of formal trade, or else informal trade shall persist, even if a policy of free
trade47 is set up between the two countries.

Thus, the EXIM Bank does met out credit to developing nations and helps in fostering
International Trade through different ways.48 This result specially has been witnessed after
the Liberalization Policy adopted by India.4950

of India by a Committee Chaired and Co-ordinated by G.S. Dutt, IAS Officer, who was the Joint Secretary of
Foreign Trade and Investment, Department of Economic Affairs, Ministry of Finance, Government of India, in
2003. The link to the report is http://finmin.nic.in/reports/ProExport.pdf.
42
R. G. Gidadhubli, India's Exports to Russia: Complexities and Contradictions, EPW (30) 44 (Nov. 4th, 1995).
43
R. G. Gidadhubli, Moving Towards Consolidation: India-Russia Trade Relations, EPW (30) 3 (Jan 17-23,
1998).
44
http://www.ndtv.com/india-news/india-could-provide-soft-credit-to-nepal-1204145.
45
Nisha Taneja and Sanjib Pohit, Indias informal Trade with Nepal, EPW (36) 25, (June 23-29, 2001).
46
Nisha Taneja and Sanjib Pohit, Characteristics of Indias Formal and Informal Trading with Nepal: A
comparative Analysis, EPW (37) 1, (Jan-June 2002).
47
Lay Hong Tan, Will ASEAN economic integration progress beyond a free trade area?, I.C.L.Q. 935 (2004).
48
Armando Barrientos & David Hulme, Social Protection for the Poor and Poorest in Developing Countries:
Reflections on a Quiet Revolution, Oxford Developmental Studies (37) 4, (2009).
49
Aparna Viswanathan, India: Exchange Control Liberalisation, J.I.B.L.R. N115 (2005).
50
Anonymous, New Export Policy, EPW (21) 51 (Dec 20, 1986).

EXIM Bank and Its Role in International Trade Page 14


CONCLUSION

This project aimed at assessing the role played by the EXIM Bank of India in fostering
International trade. I focused mainly on Export Credits granted by the Bank and how feasible
has the bank been in its numerous initiatives and endeavours. For the purposes of the same, a
brief case study of the impact of the EXIM Bank on Indo-Russia trade relations and Indo-
Nepal trade relations was done.

It was found that steadily the EXIM Bank has been contributing in developing the GDP of
India. Ours is a developing nation. Thus, India focusses more on finding ways in which the
turnover of its export ventures can be increased, both in terms of value and quantity. This
would also enable our nation to increase the employment opportunities which it can offer, by
leaps and bounds. However, a persistent problem in businesses which involve exports and
imports is, they always involve an extremely high degree of risk, which prohibits investors
for going ahead with such ventures. The EXIM Bank, by providing both credit and
consultation services to such potential businessmen, help to inculcate the attitude of positive
growth in the Export Sector for the country, by aiding and protecting them from high risks
associated with their business ventures.

In this way, the Bank has been successful in improving the status of Exports in the country.
Consequently, this has made the Bank more capable of advancing loans and credit facilities
to a wider spectrum of borrowers. Thus, we can say that the EXIM Bank of India has been a
major reason which has propelled Indias globalization and success.

EXIM Bank and Its Role in International Trade Page 15