INDUSTRY
Insurance-starved Indian ships get Rs 12,980-crore, sovereign guarantee-backed cover
- IBJ Bureau
- Apr 19, 2026
The Union Cabinet has approved a $1.4-billion (Rs 12,980-crore) sovereign guarantee to back a new industry-led pool, with insurance becoming scarce amid the West Asia crisis.
The insurance pool will cover maritime risks, including hull and machinery, cargo, protection and indemnity (P&I) and war risk.
The Bharat Maritime Insurance Pool will start with a corpus of about $100 million (Rs 950 crore), funded by contributions from General Insurance Corporation of India (Rs 400 crore), public sector companies and insurers (Rs 280 crore) and private players, Information and Broadcasting Minister Ashwini Vaishnaw has said.
The pool will provide coverage to India-flagged vessels, India-controlled ships and those with India as their origin or destination. The cover will run for 10 years, which can be extended to 15.
“Even after the Strait of Hormuz was reopened, ships declined to operate there,” Mr Vaishnaw has said, pointing to persistent difficulties in securing reinsurance.
The government-backed mechanism is expected to cut maritime insurance costs by about 25 per cent immediately, he adds.
Rising geopolitical tensions have sharply increased risks to cargo and vessels, driving up premiums and disrupting the availability of cover.
Indian shipping has also relied heavily on the International Group of P&I Clubs for third-party liabilities, including oil pollution, wreck removal, cargo damage, crew injuries and collisions.
The new pool aims to ensure continuity of coverage and reduce vulnerability to sanctions or geopolitical shocks.
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