The Indian government has approved the creation of a new domestic maritime insurance scheme designed to safeguard the country's shipping and trade interests during periods of global instability. The Union Cabinet, chaired by Prime Minister Narendra Modi, gave its approval to the Bharat Maritime Insurance Pool (BMI Pool) on Saturday.
The scheme is backed by a sovereign guarantee of Rs 12,980 crore and is intended to ensure that Indian trade continues to receive reliable and affordable insurance coverage even when international markets are disrupted.
The decision follows a period of rising geopolitical tensions, sanctions risks and shipping disruptions that have pushed up global insurance premiums and threatened the continuity of coverage for vessels and cargo. India has long depended on international insurers, particularly the International Group of Protection and Indemnity Clubs, for essential maritime cover. The government said this reliance had left Indian trade exposed to the risk of sudden withdrawal of coverage due to sanctions or conflict.
The BMI Pool will provide insurance support to Indian-flagged vessels, Indian-controlled ships, and vessels carrying cargo to or from India, including those passing through volatile maritime routes. It will cover a wide range of risks, including hull and machinery, cargo, protection and indemnity, and war risk insurance. Policies will be issued by member insurers drawing on a combined underwriting capacity of approximately Rs 950 crore.
Beyond immediate risk protection, the government said the pool would help India build domestic expertise in marine underwriting, claims management and legal processes, while also cutting the amount of foreign exchange spent on insurance premiums.
The BMI Pool will initially run for 10 years, with the possibility of a five-year extension.
The approval comes as shipping routes across West Asia remain particularly vulnerable to conflict-related disruptions, with insurers increasingly approving coverage on a case-by-case basis at significantly higher cost.
(With inputs from agencies)
