Cabinet approves Bharat Maritime Insurance Pool with Rs 12,980 crore guarantee

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the creation of the Bharat Maritime Insurance Pool with a sovereign guarantee of Rs 12,980 crore.

The pool is designed to ensure continuous and affordable maritime insurance coverage for Indian trade, covering risks including hull and machinery, cargo, protection and indemnity, and war risk.

Policies under the pool will be issued by member insurers using the pool’s combined underwriting capacity, estimated at around Rs 950 crore.

Coverage will extend to Indian-flagged vessels, Indian-controlled ships, and all vessels with either an origin or destination in India, including those transiting volatile maritime corridors.

The government said the initiative aims to reduce Indian trade’s dependence on international insurance clubs amid global volatility and geopolitical instability affecting maritime routes.

The sovereign guarantee has been structured for an initial ten-year period, with a provision for a five-year extension, according to the Cabinet’s approval.

Officials said the pool would give Indian shipowners and traders more predictable access to insurance even when transiting through regions affected by conflict or heightened security risk, where global insurers have periodically withdrawn or restricted coverage.

The scheme is expected to particularly benefit smaller Indian shipping companies that have historically found it harder to secure competitively priced cover from the international marine insurance market.

In a separate decision on the same day, the Cabinet also approved the establishment of a bench of the High Court of Jammu and Kashmir and Ladakh in the Union Territory of Ladakh, aimed at improving access to justice for residents of remote areas.

Industry bodies representing India’s shipping and logistics sector have broadly welcomed the maritime insurance pool, saying it addresses a long-standing gap in affordable coverage that has periodically disrupted trade flows during periods of heightened global tension.

The finance ministry said the pool would be reviewed periodically to ensure its underwriting capacity keeps pace with growth in Indian-flagged shipping tonnage and overall trade volumes moving through Indian ports.

Photo by Kandukuru Nagarjun, Wikimedia Commons, CC BY 2.0