India Launches $1.5 Billion Maritime Insurance Pool To Shield Shipping From War And Sanctions Risks

The Indian government on Tuesday launched the $1.5 billion Bharat Maritime Insurance Pool (BMIP) with a sovereign guarantee of $1.4 billion (₹12,980 crore) to ensure uninterrupted maritime insurance coverage for Indian-linked shipping operations amid geopolitical tensions, including the ongoing situation in West Asia.

The initiative was launched by the Department of Financial Services (DFS) under the Ministry of Finance during an event chaired by DFS Secretary M. Nagaraju.

During the event, the first Marine Hull and Machinery War Policy issued under the pool was handed over to Hoger Offshore and Marine Pvt Ltd.

The policy was issued by The New India Assurance Company Ltd, marking the operational start of the new maritime insurance mechanism.

According to the government, the BMIP will cover maritime risks including hull and machinery, cargo, protection and indemnity (P&I), and war risks for Indian-flagged vessels, India-controlled ships, and vessels travelling to or from India.

Officials said the pool has been created to reduce dependence on foreign reinsurers and strengthen India’s ability to manage maritime insurance risks, especially in high-risk regions or sanction-sensitive trade routes where foreign insurers may withdraw support.

The Finance Ministry said sanctions can affect insurance support for vessels or cargo linked to sanctioned countries, which can disrupt shipping operations and trade flows.

The BMIP has been structured to provide sufficient domestic underwriting capacity to continue coverage in such situations.

Apart from the policy issued to Hoger Offshore and Marine Pvt Ltd, a marine cargo war policy was also issued to Vedanta Sterlite Copper Ltd for imports of cable wires. Another policy was issued to Balrampur Chini Mills Ltd.

Speaking at the launch, M. Nagaraju said the pool would insure vessels travelling to India or departing from India to destinations worldwide, including West Asia. He said the initiative was intended to provide assurance to India’s maritime trade sector.

The government has also formed a governing body to oversee the functioning of the pool, including approvals related to the use of the sovereign guarantee.

An underwriting committee has also been set up to ensure technically sound and consistent underwriting of risks covered under the mechanism.

General Insurance Corporation of India (GIC Re) will act as the pool administrator and will manage reporting, reinsurance arrangements, and performance monitoring of the pool.

Under the structure approved by the government, claims up to $100 million will be handled through the pool’s own capacity.

Claims above that amount will be backed by the sovereign guarantee after the exhaustion of reserves, member contributions, and reinsurance arrangements.

Policies under the BMIP will be issued by domestic insurers that are members of the pool.

Risks covered under these policies will then be reinsured among pool members according to their committed underwriting capacity.

The government said the mechanism would help maintain shipping operations and trade continuity even if foreign reinsurance coverage is withdrawn due to sanctions or geopolitical tensions.

It added that the pool would strengthen India’s maritime risk protection framework and support secure global trade operations in the future.

References: ddnews, hindustantimes