Union Cabinet approved the creation of a domestic insurance pool, ‘Bharat Maritime Insurance Pool’ (BMI Pool) , backed by a sovereign guarantee of ₹12,980 crore to facilitate continuous maritime insurance coverage for Indian trade.
The pool aims to ensure that Indian trade continues to have access to affordable insurance for vessels carrying cargo from any international origin to Indian ports and vice-versa, even when transiting volatile maritime corridors.
Why was it needed?
Increased global volatility and geopolitical instability has raised the risk of losses for cargo and vessels, resulting in higher insurance costs and uncertainty in coverage availability.
Additionally, India had a high dependence on the International Group of Protection and Indemnity (IGP&I) Club for P&I insurance covering third-party liabilities such as oil pollution, wreck removal, cargo damage, crew injury and repatriation, and collision liabilities.
This dependence posed risks of coverage withdrawal due to sanctions or geopolitical tensions, necessitating a domestic maritime risk pool to maintain sovereignty and continuity of trade.
Key Features of BMI Pool
- Objective: To manage liability insurance locally, tailored to Indian Shipping conditions and regulatory requirements, develop specialized Marine underwriting, claims management and legal expertise within India.
- Coverage: The pool covers all maritime risks: Hull and Machinery, Cargo, Protection & Indemnity (P&I), and War Risk, for Indian flagged or controlled vessels, or vessels destined to or starting from India, including those transiting volatile maritime corridors.
- Underwriting Capacity: The combined underwriting capacity of the pool would be around ₹950 crore. Policies will be issued by insurers that are Pool members, using the pool’s combined capacity.
- Governance: A Governing Body will be constituted to oversee the formation and functioning of the pool.
- Rationale for Sovereign Guarantee: Rooted in the objectives of strengthening self-reliance, sanctions resilience, and ensuring greater sovereign control over maritime insurance.
Benefits
- Ensures affordable and continuous maritime insurance for Indian trade even during geopolitical disruptions
- Develops specialised marine underwriting, claims management, and legal expertise within India
- Manages liability insurance locally, tailored to Indian shipping conditions and regulatory requirements
- Reduces dependence on international P&I clubs
- Strengthens India’s maritime sovereignty and Atmanirbharta in insurance