The Union Cabinet on Saturday approved the creation of a domestic maritime insurance mechanism, the Bharat Maritime Insurance Pool (BMI pool) — backed by a sovereign guarantee of ₹12,980 crore to ensure uninterrupted insurance coverage for Indian shipping amid rising global risks.
According to an official statement, the initiative is aimed at reducing India’s dependence on foreign insurers and insulating maritime trade from disruptions caused by geopolitical tensions and sanctions.
The proposed pool will provide comprehensive coverage across major maritime risks, including Hull and Machinery, Cargo, Protection and Indemnity (P&I), and war risk insurance. It will apply to Indian-flagged vessels as well as ships carrying cargo to and from Indian ports, even when navigating volatile international routes.
The move comes at a time when global shipping has been increasingly exposed to conflict-related disruptions and rising insurance premiums, particularly in sensitive corridors such as the Strait of Hormuz.
Reducing foreign dependency
At present, Indian vessels rely heavily on international insurers, especially the International Group of Protection and Indemnity Clubs, for third-party liability coverage. These include risks such as oil pollution, cargo damage, crew injury, wreck removal and collision liabilities.
Officials said this dependence exposes Indian shipping to vulnerabilities, particularly in situations where international insurers withdraw coverage due to sanctions or geopolitical instability.
“The domestic insurance pool will address global volatility and reduce external insurance dependency of Indian vessels,” the statement said.
Insurance policies under the pool will be issued by member insurers, drawing on a combined underwriting capacity estimated at around ₹950 crore. A governing body will be set up to oversee the pool’s formation and operations.
The government said the initiative would also help build domestic expertise in marine underwriting, claims management and legal processes tailored to Indian shipping conditions.
The sovereign guarantee backing the pool is intended to enhance confidence among stakeholders and ensure continuity of trade. The move aligns with the broader push for self-reliance and greater sovereign control over critical sectors.
By creating a domestic risk-sharing mechanism, the government aims to stabilise insurance costs, ensure availability of coverage, and safeguard India’s maritime trade flows in uncertain global conditions.
Officials emphasised that the pool would act as a buffer against external shocks, ensuring that Indian shipping and trade operations remain resilient even during periods of heightened geopolitical tension.
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