Cabinet Approves ₹12,980 Crore ‘Bharat Maritime Insurance Pool’ Amid Global Risks

The decision comes against a backdrop of rising global instability, where conflicts, sanctions, and maritime security threats have significantly increased risks for cargo and vessels.

 In a major step toward strengthening India’s trade resilience and financial sovereignty, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the creation of a ‘Bharat Maritime Insurance Pool’ (BMI Pool), backed by a sovereign guarantee of ₹12,980 crore.

The initiative is designed to ensure uninterrupted and affordable maritime insurance coverage for Indian shipping, particularly as global geopolitical tensions and volatile sea routes increasingly disrupt international trade.

Ensuring Continuity in a Riskier Global Environment

The decision comes against a backdrop of rising global instability, where conflicts, sanctions, and maritime security threats have significantly increased risks for cargo and vessels. These factors have led to:

• Higher insurance premiums

• Reduced availability of coverage

• Greater uncertainty for shipping operators

The new BMI Pool aims to address these challenges by providing a reliable domestic insurance mechanism, ensuring that vessels carrying cargo to and from Indian ports remain protected—even when passing through high-risk maritime corridors.

Reducing Dependence on Global Insurance Clubs

Currently, Indian shipping heavily relies on the International Group of Protection and Indemnity (IGP&I) Clubs for coverage of third-party liabilities such as:

• Oil pollution and environmental damage

• Wreck removal operations

• Cargo loss or damage

• Crew injury and repatriation

• Collision-related liabilities

However, geopolitical tensions and sanctions can lead to sudden withdrawal or restriction of such coverage.

The BMI Pool seeks to reduce this dependency by building domestic capacity, ensuring continuity of insurance even in adverse global conditions.

Comprehensive Risk Coverage Under One Umbrella

The Bharat Maritime Insurance Pool will provide coverage across the full spectrum of maritime risks, including:

• Hull and Machinery insurance

• Cargo insurance

• Protection and Indemnity (P&I) coverage

• War risk insurance

Policies will be issued by member insurers using a combined underwriting capacity of approximately ₹950 crore, allowing for risk-sharing and broader coverage capabilities.

The pool will cater to:

• Indian-flagged vessels

• Indian-controlled vessels

• Ships operating to or from Indian ports

Boosting Domestic Expertise and Industry Capability

Beyond risk coverage, the initiative is expected to play a key role in developing India’s maritime insurance ecosystem by:

• Building specialized underwriting capabilities

• Strengthening claims management systems

• Enhancing legal and regulatory expertise in marine insurance

Officials say this will enable solutions tailored specifically to Indian shipping conditions, improving efficiency and responsiveness.

Sovereign Guarantee to Strengthen Confidence

The ₹12,980 crore sovereign guarantee is a critical component of the initiative, providing financial backing to ensure stability and credibility of the pool.

The government said the guarantee is aligned with broader objectives of:

• Promoting Aatmanirbharta (self-reliance)

• Enhancing resilience against sanctions and external shocks

• Increasing sovereign control over critical trade infrastructure

Governance and Oversight Mechanism

A dedicated Governing Body will be constituted to oversee the formation and functioning of the BMI Pool, ensuring transparency, regulatory compliance, and efficient operations.

Strategic Implications for India’s Trade

India’s maritime sector handles over 90% of the country’s trade by volume, making reliable insurance coverage a critical pillar of economic stability.

Experts note that the BMI Pool could:

• Stabilize insurance costs for Indian shipping companies

• Improve confidence among exporters and importers

• Strengthen India’s position in global trade logistics

• Reduce vulnerability to external financial and geopolitical disruptions

A Step Toward Maritime Self-Reliance

The approval of the Bharat Maritime Insurance Pool marks a significant policy shift toward building domestic financial infrastructure for global trade.

As uncertainties in global shipping lanes continue to rise, the initiative positions India to better protect its trade interests while fostering a robust, self-sufficient maritime ecosystem.