The Indian Union Cabinet has cleared the establishment of a domestic maritime insurance arrangement, the Bharat Maritime Insurance Pool (BMI pool), supported by a sovereign guarantee of Rs129.8bn ($1.4bn).
The insurance pool is aimed at ensuring uninterrupted availability of marine insurance.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
According to the decision, the pool is meant to keep insurance accessible for ships moving cargo between Indian ports and overseas locations in both directions, including routes that pass through high-risk maritime areas.
The approval comes as “geopolitical instability” has increased exposure to losses involving vessels and cargo, contributing to higher premiums and uncertainty over whether cover will remain available without breaks.
The government also noted that Indian vessels rely heavily on the International Group of Protection and Indemnity Club for protection and indemnity (P&I) insurance, which covers third-party liabilities such as oil pollution liability, cargo damage, wreck removal, crew injury and repatriation, and collision liabilities, among others.
It said a domestic pool was required to safeguard continuity of trade and maintain sovereignty in situations where cover could be withdrawn due to sanctions or geopolitical “tensions”.
The BMI pool will apply to “Indian flagged or controlled vessels”, and to vessels either bound for India or departing from India.
It is set to provide cover across key marine risk categories including hull and machinery, cargo, P&I and war risk.
Insurance policies will be written by insurers participating as pool members, using the pool’s combined underwriting capacity, estimated at around Rs.9.5bn.
A governing body will be constituted to supervise the pool’s establishment and operations. The stated basis for the sovereign guarantee is linked to strengthening “self-reliance”, “resilience” to sanctions and “greater” sovereign control.
Earlier this month, the US International Development Finance Corporation doubled its Gulf maritime facility capacity to $40bn with the addition of six new insurers.
The facility executes President Trump’s directive to secure maritime trade through the Strait of Hormuz and stabilise global commerce amid ongoing regional tensions.
