The government launched the Bharat Maritime Insurance Pool with USD 1.4 billion coverage backed by a sovereign guarantee. This initiative aims to strengthen India's maritime trade resilience and reduce dependence on foreign insurance players.
The government has launched the Bharat Maritime Insurance Pool with an estimated coverage capacity of USD 1.4 billion, or nearly Rs 13,000 crore, backed by a sovereign guarantee to strengthen India's maritime trade resilience and reduce dependence on foreign insurance players, M Nagaraju Secretary Department of Financial Services said on Tuesday.
Coverage and Capacity
Speaking at the launch event, Nagaraju said, "The Bharat Maritime Insurance Pool will cover all Indian flag vessels, coastal vessels, or even vessels destined for India or starting from India to ensure that Indian trade continues to have access to stable and affordable insurance for vessels carrying cargo from any international origin to Indian coast, even transiting volatile maritime corridors."
The secretary further added that it can cover up to 1.4 billion dollars, which is almost about Rs 13,000 crore. "We have taken the sovereign guarantee, and sovereign guarantee has been provided."
Response to Geopolitical Uncertainty
Nagaraju said the initiative assumes significance amid growing geopolitical uncertainties and disruptions in global trade flows, particularly in maritime routes linked to energy imports and strategic cargo movement. He noted that rising geopolitical tensions have sharply increased maritime insurance premiums, in some cases by as much as 100 per cent, affecting the movement of goods and vessels across critical international trade corridors.
"The world as such is passing through uncertain times. One of the most impacted is trade flows. Trade flows do not happen only because of surplus or deficit. It also happens through containers, vessels, and security of repayment. Because of the current situation, premiums have gone up," he said.
Building Self-Reliance in Maritime Insurance
Highlighting India's dependence on foreign insurers for maritime protection, Nagaraju said India remains the only major economy without a domestic Protection and Indemnity (P&I) Club.
"We depend mostly on the Middle East and other countries for our energy supplies, and it is not going to go away. Nobody is going to tell that our dependence on the Middle East will disappear in the next 10-15 years. We are going to require both reinsurance as well as P&I," he said.
Roadmap for Domestic P&I Club
He added that the government has simultaneously created a roadmap for establishing and strengthening a domestic P&I Club to support Indian shipping lines and improve long-term maritime insurance capabilities.
Comprehensive Coverage and Strategic Goals
According to Nagaraju, the Bharat Maritime Insurance Pool will provide comprehensive coverage, including hull and machinery insurance, cargo insurance, P&I coverage, and war risk insurance. He said the initiative is aimed at promoting self-reliance in maritime insurance, reducing dependence on foreign entities, strengthening resilience against sanctions and geopolitical disruptions, and ensuring greater sovereign control over India's maritime trade.
Administration and Claims Process
The pool will be administered by General Insurance Corporation of India (GIC Re), with participating insurers forming a common underwriting committee to determine premium rates, policy conditions, deductibles, and risk acceptance criteria.
Explaining the claims structure, Nagaraju said claims up to USD 100 million will be serviced through the pool's own capacity, while the sovereign guarantee mechanism will act as a backstop only after reserves, reinsurance support, and contributions are exhausted.
He also thanked the Insurance Regulatory and Development Authority of India (IRDAI), the Department of Economic Affairs (DEA), and participating insurance entities for supporting the initiative and ensuring quick operationalisation of the pool. (ANI)
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)