India builds $1.4b maritime insurance pool to cut foreign reliance

The scheme will cover hull cargo liability and war risks for Indian linked vessels.

India has approved the creation of a domestic maritime insurance pool backed by a $1.4b (INR129.8b) sovereign guarantee, in a move aimed at reducing the shipping sector’s exposure to global market volatility.

The initiative, called the Bharat Maritime Insurance Pool, will provide cover across hull and machinery, cargo, protection and indemnity (P&I), and war risks. 

It is designed to support Indian-flagged and Indian-controlled vessels, including those operating in high-risk international shipping routes.

Shipping minister Sarbananda Sonowal said the mechanism would help reduce reliance on foreign insurers and ensure continuous risk coverage for India’s maritime trade. 

He added that the programme is aligned with the country’s broader Maritime India Vision 2030.

India’s maritime sector accounts for more than 70% of trade by volume and nearly 95% by value. 

However, insurance coverage has largely been provided by overseas underwriters, leaving the sector exposed during periods of geopolitical disruption. 

Recent tensions affecting key shipping corridors such as the Red Sea, the Strait of Hormuz and the Gulf of Oman have led some global insurers to raise premiums or withdraw cover, increasing costs and uncertainty for Indian shipping operators.

The new pool aims to address these gaps by ensuring access to insurance regardless of external market conditions. It will cover physical damage to vessels, cargo in transit, third-party liabilities such as crew injury and environmental damage, and risks linked to operating in conflict-affected areas.

($1.00 = INR93.34)