India approves ₹12,980 crore maritime insurance pool to cut risk

The Union Cabinet has approved the creation of a domestic maritime insurance pool with a sovereign guarantee of ₹12,980 crore to protect India’s maritime trade from global volatility and reduce reliance on foreign insurers.

The proposed ‘Bharat Maritime Insurance Pool’ (BMI Pool) will offer comprehensive coverage for Indian-flagged and Indian-controlled vessels, including those operating in conflict-prone international waters. The coverage will include hull and machinery, cargo, protection and indemnity (P&I), and war risk.

Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal described the decision as a transformational step to strengthen India’s maritime resilience. He said the move would help reduce the sector’s exposure to foreign insurance cycles and geopolitical shocks while ensuring the country has the capacity to safeguard its maritime trade in challenging global scenarios.

India’s maritime sector handles more than 70 per cent of the country’s trade by volume and nearly 95 per cent by value. However, insurance coverage has largely been dependent on foreign providers. This vulnerability was highlighted during recent disruptions in key shipping corridors such as the Red Sea, Strait of Hormuz and the Gulf of Oman, where global insurers increased premiums or withdrew coverage, affecting exporters and shipping operators.

The BMI Pool aims to ensure continuity of insurance coverage regardless of geopolitical developments. It will help stabilise trade flows and reduce cost pressures on exporters and logistics stakeholders.

The pool will provide insurance for vessels carrying cargo between India and international ports in both directions. It will cover ship structures under hull and machinery insurance, goods in transit under cargo insurance, and third-party liabilities such as crew injury and environmental damage under P&I coverage. It will also include war risk insurance for operations in high-risk regions.

Sonowal said the initiative reflects a broader push for strategic self-reliance in critical sectors. He added that the mechanism is aimed at building resilient systems to protect national interests while supporting India’s global trade ambitions.

Officials said the move aligns with Maritime India Vision 2030, which identifies the development of a strong insurance ecosystem as a key step towards positioning India as a leading maritime nation. It also brings India in line with countries such as the United Kingdom, Japan and South Korea, which have state-supported maritime insurance frameworks.