India has approved a sovereign-backed domestic maritime insurance scheme aimed at protecting its shipping and trade from global disruptions and dependence on foreign insurers.
The Union Cabinet, chaired by Prime Minister Narendra Modi, cleared the Bharat Maritime Insurance Pool on Saturday.
The scheme will be supported by a sovereign guarantee of Rs 12,980 crore to ensure continued access to affordable insurance coverage during periods of geopolitical instability.
The move comes amid rising tensions, sanctions risks, and disruptions in key shipping routes that have driven up global insurance premiums and created uncertainty over coverage. India has traditionally relied on international insurers, especially the International Group of Protection and Indemnity Clubs, leaving its trade vulnerable to the sudden withdrawal of services during conflicts or sanctions.
The Bharat Maritime Insurance Pool will offer coverage to Indian-flagged vessels, Indian-controlled ships, and those carrying cargo to or from India, including routes considered high risk. It will cover hull and machinery, cargo, protection and indemnity, and war-related risks.
Policies under the scheme will be issued by member insurers with a combined underwriting capacity of around Rs 950 crore.
The government said the initiative will not only provide immediate risk protection but also help build domestic expertise in marine underwriting, claims management, and legal processes. It is also expected to reduce the outflow of foreign exchange spent on insurance premiums.
The scheme will run for an initial period of 10 years, with an option to extend it by five years.
The approval comes as shipping routes across West Asia remain vulnerable to conflict-related disruptions, with insurers increasingly offering coverage selectively and at significantly higher costs.