Centre announces maritime insurance pool worth 12,980 crore to protect Indian vessels
New Delhi, April 18
Amid the West Asia crisis and geo-political tensions, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved the proposal for creation of a domestic insurance pool with a sovereign guarantee of Rs 12,980 crore, to facilitate continuous maritime insurance coverages for Indian flagged or controlled vessels or vessels destined to or starting from India.
The pool, called 'Bharat Maritime Insurance Pool' (BMI pool), ensures that Indian trade continues to have access to affordable insurance for vessels carrying cargo from any international origin to Indian ports and vice-versa, even when transiting volatile maritime corridors.
The pool would cover all maritime risks like Hull and Machinery, Cargo, P&I (protection and indemnity) and War risk.
The policies will be issued by insurers that are pool members, using the combined underwriting capacity of the pool, which would be around Rs 950 crore.
The pool will further help to manage liability insurance locally, tailored to Indian Shipping conditions and regulatory requirements, develop specialised Marine underwriting, claims management and legal expertise within the country, said the official statement.
Moreover, a governing body constituted for this pool would oversee the formation and functioning of the pool.
According to the government, with increased global volatility and geopolitical instability, maritime trade has been impacted with increased risk of losses for cargo and vessels resulting in increased insurance costs and uncertainty in continuous availability of insurance.
There is high dependence of Indian vessels on International Group of Protection and Indemnity (IGP&I) Club for P&I insurance covering third-party liabilities like Oil pollution liability, Wreck removal, Cargo damage, Crew injury and repatriation, Collision liabilities and so on.
There was a need for a domestic maritime risk covering pool to maintain sovereignty and continuity of trade in face of withdrawal of coverage due to sanctions or due to geopolitical tensions, said the government.
— IANS
Reader Comments
This is excellent for our shipping industry and exporters. Finally, we won't have to beg for coverage from international clubs during a crisis. Hope the premiums are genuinely affordable for our small and medium ship owners too.
Good step, but the devil is in the details. A 13,000 crore sovereign guarantee is a huge amount of public money. We need complete transparency on the governing body and how claims will be managed. Hope this doesn't become another burden on taxpayers if risks materialize.
As someone working in logistics, this is a huge relief. The uncertainty and skyrocketing costs for war risk coverage in the last few months were crippling. A stable, domestic pool will bring much-needed predictability for Indian trade routes.
Building domestic expertise in marine underwriting and legal claims is the real win here. We can't be a $5 trillion economy relying on others for such specialized knowledge. This pool should also focus on training and creating high-skill jobs in this niche field.
Sovereignty in trade is non-negotiable. When foreign entities can withdraw coverage due to geopolitical pressure, it directly hits our economy. This pool is a shield. Hope it's implemented efficiently without red tape.
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