Export Insurance in India: A Must-Have Guide for First-Time Exporters

As India's small businesses and artisans expand into international markets, one critical aspect often gets overlooked—export insurance. From Kolkata’s delicate terracotta to Malda’s juicy mangoes, Indian exports are exposed to risks ranging from physical damage to buyer defaults.

This guide explains the types of export insurance available, what they cover, and how you can secure your shipments while protecting your payments.

Why Exporters Need Insurance

Exporting is not just about shipping goods overseas. It comes with financial and operational risks that can derail your business if not managed properly. Major Risks include:

• Damage during transit (e.g., broken handicrafts, spoiled food items)

• Non-payment by international buyers

• Theft, pilferage, or delays at ports

• Political risks like sanctions, war, or currency restrictions

  
  

Having the right export insurance policy protects your business from these risks, improves buyer confidence, and may even be a requirement for trade finance from banks.

Types of Export Insurance in India

A. Marine Cargo Insurance (Sea Freight)

Marine cargo insurance is essential for goods transported by sea. It protects against loss or damage caused by ship accidents, water ingress, fire, theft, and more.

Coverage is usually based on the Institute Cargo Clauses (ICC):

• ICC-A: Comprehensive protection. Ideal for fragile, perishable, or high-value goods.

• ICC-B: Covers fire, collision, and seawater damage, but excludes breakage or theft.

• ICC-C: Basic protection. Suitable only for low-risk cargo.

  
  

✅ Recommendation: Choose ICC-A with certified export packaging if you’re exporting handicrafts, textiles, or agricultural products.

B. Inland Transit Insurance

This policy covers goods while they are transported within India—say, from Shantiniketan to Kolkata Port. It's crucial for pre-export movement via road or rail.

C. Air Cargo Insurance

If you’re shipping high-value, time-sensitive goods like garments, electronics, or perishables by air, this policy covers risks like turbulence, rough handling, or aircraft damage.

D. Export Credit Insurance (ECGC)

The Export Credit Guarantee Corporation of India (ECGC) offers insurance that protects against non-payment by foreign buyers due to commercial or political reasons. Note: it doesn’t cover product damage or disputes over product quality.

E. Export Packaging Insurance

This add-on policy covers losses due to packaging failure. Many insurers require third-party packaging certification(from SGS, Intertek, Bureau Veritas, etc.) to validate your packaging's strength and moisture resistance.

F. Comprehensive Export Insurance Packages

Many insurers now offer bundled solutions that include marine, inland transit, packaging, and credit insurance in one convenient package. These plans reduce administrative hassle and often come with discounted premiums.

Popular examples include:

• ECGC Standard Policy with Transit Rider

• ICICI Lombard Marine + Inland Combo

• HDFC Ergo Marine Cargo Open Policy

• TATA AIG Warehouse-in-Transit Plan

  
  

Common Misconceptions About Export Insurance

❌ “ICC-A covers packaging failures.” — False. Packaging damage is typically excluded unless separately insured and certified.

❌ “ECGC will pay if the product is broken and the buyer refuses to pay.” — False. ECGC only covers default or political risks, not physical damage or disputes.

❌ “Transit insurance is only for big exporters.” — False. MSMEs and artisan exporters are often more vulnerable and need protection just as much.

What Indian Exporters Should Do

Here’s a quick action list for exporters looking to secure their shipments and payments:

• Choose ICC-A marine insurance for fragile or moisture-sensitive products

• Get inland transit insurance for domestic movement before shipping

• Take air cargo insurance for air-shipped goods

• Register with ECGC for credit risk protection

• Obtain third-party packaging certification for higher claims acceptance

• Consider bundled or combo insurance policies for wider coverage and cost-effectiveness

  
  

Bonus Tip: Calculate Export Costs Correctly

Insurance cost is a key part of your total export pricing. Want to understand how to price your exports accurately?

🔗 Read: How to Calculate Export Prices – A Comprehensive Guide

Final Thoughts

Export insurance is not optional—it’s essential for sustainable, risk-managed international trade. Whether you're a seasoned exporter or just starting, investing in the right coverage safeguards your profits, builds buyer confidence, and supports your long-term growth.