New Delhi, 18 April (H.S.): The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the creation of a domestic insurance mechanism called the Bharat Maritime Insurance Pool (BMI Pool), backed by a sovereign guarantee of ₹12,980 crore, to reduce India’s dependence on foreign insurers and secure affordable, year‑round coverage for Indian‑flagged vessels.

The move is aimed at ensuring continuity of trade, even in times of geopolitical tensions, rising insurance premiums, and sanctions‑related disruptions on global shipping routes.

Union Minister Ashwini Vaishnaw, briefing the media at the National Media Centre, said the BMI Pool will provide continuous maritime insurance coverage for vessels carrying cargo to and from India, including those operating under the Indian flag or those controlled by Indian entities.

The pool will cover a full spectrum of marine risks—hull and machinery, cargo, protection and indemnity (P&I), and war risk—for ships traversing volatile maritime corridors such as the Persian Gulf and other high‑risk zones.

Vaishnaw explained that the new structure is designed to overcome the vulnerabilities created by global volatility and geopolitical instability, which have repeatedly pushed up insurance costs and made coverage sporadic or unaffordable for Indian‑owned ships.

By relying less on foreign underwriters and international insurance groups, the government aims to strengthen self‑reliance, resilience against sanctions, and greater sovereign control over India’s maritime insurance regime.

Under the approved scheme, the BMI Pool will operate with a combined underwriting capacity of around ₹950 crore, with policies issued by domestic insurers who are members of the pool using this pooled capital.

A dedicated Governing Body will oversee the formation and functioning of the pool, ensuring that tariffs, claims settlements, and risk‑management practices are aligned with Indian shipping conditions and regulatory requirements.

The sovereign guarantee, which acts as a backstop for the pool, is intended to reassure local insurers and reinsurers that they can participate in underwriting high‑risk segments—such as war‑risk cover and P&I liabilities—without exposing themselves to catastrophic losses during flare‑ups in conflict‑prone regions.

The government also expects the pool to spur the growth of specialized marine underwriting, claims management, and insurance‑law expertise within India, reducing the need to outsource complex maritime disputes and coverage design to overseas markets.

With India’s sea‑borne trade heavily exposed to disruptions in the Middle East, the Red Sea, and the Strait of Hormuz, the BMI Pool is seen as a key part of the country’s evolving strategic insurance shield. By providing predictable, locally managed cover for Indian ships, even in conflict‑affected waters, the pool will help keep cargo flows, energy imports, and critical supplies moving smoothly, without crippling spikes in insurance premiums.

In the longer term, the framework is expected to dovetail with other initiatives—such as a domestic Protection and Indemnity (P&I) club and sovereign‑backed war‑risk funds—to create a comprehensive domestic ecosystem that can handle the full range of maritime risks, from hull damage and cargo loss to pollution, third‑party liabilities, and war‑related perils.

Indian shipping stakeholders have welcomed the move as a decisive step toward reducing external dependence and building a robust, India‑centric marine insurance architecture capable of protecting the nation’s trade lifeline in an increasingly uncertain global order.

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Hindusthan Samachar / Jun Sarkar