IGNOU IBO 4 2026 - What is the purpose of extending packing credit to exporters

Question

What is the purpose of extending packing credit to exporters? Explain the procedures of packing credit.

12 Feb 2026

Answer :

Word Count : 450

Packing credit is a short-term pre-shipment finance provided to exporters to meet the working capital requirements for manufacturing, processing, or procuring goods for export. The main purpose of extending packing credit is to ensure that exporters have sufficient funds to purchase raw materials, process goods, cover labor costs, pay for packaging, and manage other pre-shipment expenses without facing liquidity constraints. By providing financial support before the actual shipment of goods, packing credit facilitates smooth export operations and enables exporters to meet international delivery commitments on time, thereby enhancing their competitiveness in global markets. It also

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