Cabinet clears Rs 12,980-crore maritime insurance pool to shield shipping from global risks

In a bid to protect India’s shipping sector from rising global uncertainties, the Union Cabinet on Saturday approved the creation of a domestic insurance mechanism—the ‘Bharat Maritime Insurance Pool’ (BMI Pool)—backed by a sovereign guarantee of Rs 12,980 crore to ensure uninterrupted maritime insurance coverage.

‎Announcing the decision after the Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw said the initiative is designed to provide “continuous and affordable insurance cover for Indian vessels and cargo, even in volatile maritime conditions.” He added that the pool would help address growing risks stemming from geopolitical instability and disruptions in global insurance markets.

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‎The BMI Pool will provide coverage across a wide spectrum of maritime risks, including Hull and Machinery, Cargo, Protection and Indemnity (P&I), and War Risk. It will apply to Indian-flagged or controlled vessels as well as ships transporting cargo to and from Indian ports, even when traversing high-risk or conflict-prone sea routes. Officials said the mechanism would help safeguard India’s trade flows despite increasing volatility in international waters.

‎The move comes amid rising insurance costs and concerns over the availability of coverage due to geopolitical tensions, sanctions regimes, and conflicts affecting key global shipping corridors. Currently, Indian shipping firms rely heavily on international insurers such as the International Group of Protection and Indemnity Clubs for third-party liability coverage, including risks related to oil pollution, cargo damage, crew injury, and collisions. Any disruption or withdrawal of such cover can significantly impact trade continuity.

‎“The domestic pool will reduce dependence on external insurance providers and strengthen India’s capacity to manage maritime risks internally,” Vaishnaw said, underlining that the initiative aligns with the government’s broader push for self-reliance and economic resilience.

‎Under the approved framework, policies will be issued by member insurers with a combined underwriting capacity of around Rs 950 crore. The pool is also expected to nurture specialised capabilities in marine underwriting, claims management, and maritime legal services within the country.

‎A governing body will be set up to oversee the pool’s operations, ensuring regulatory compliance and effective risk management. Officials noted that the sovereign guarantee is intended to boost confidence in the domestic system, particularly in situations where global insurers may pull back due to sanctions or geopolitical pressures.

‎The initiative is being seen as a strategic effort to secure India’s maritime trade lifelines while strengthening sovereign control over critical insurance infrastructure linked to the shipping industry.