The Department of Financial Services has launched the Bharat Maritime Insurance Pool of $1.5 billion to facilitate continuous maritime insurance coverage for Indian maritime trade amid current tensions in the Middle East.
The pool has been launched with a sovereign guarantee of $1.4 billion, equivalent to ₹12,980 crore, according to a statement by the Ministry of Finance on Tuesday, 12 May.
The event was chaired by Department of Financial Services Secretary M. Nagaraju.
The pool will cover maritime risks including Hull and Machinery, Cargo, Protection and Indemnity and War risk for Indian-flagged or Indian-controlled vessels, as well as vessels destined to or starting from India.
According to the ministry, the pool has been created in the context of the current West Asia tensions, where restrictions or withdrawal of insurance cover in high-risk areas or sanctioned environments can disrupt shipping operations and critical trade flows.
At the launch event, the first Marine Hull and Machinery War Policy document under the Bharat Maritime Insurance Pool was handed over to Hoger Offshore and Marine Private Limited.
The policy was issued by New India Assurance Company Limited and provides financial protection against war perils while navigating through high-risk war zones.
A Marine Cargo War Policy was also presented to Vedanta Sterlite Copper Limited for the import of cable wires.
A policy was also issued to Balrampur Chini Mills Limited.
The Ministry of Finance said foreign re-insurers can withdraw support for any insurance policy that covers cargo or vessels carrying cargo from sanctioned countries.
It also said dependence of Indian vessels on the International Group Protection and Indemnity Club for P&I insurance is another area of concern.
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P&I insurance covers third-party liabilities such as oil pollution liability, wreck removal, cargo damage, crew injury and repatriation, and collision liabilities.
The ministry said the pool, backed by the sovereign guarantee, will provide sufficient underwriting capacity to cover risks adequately and enable India to increase sovereign control over maritime trade.
A governing body has been constituted to oversee the functioning of the pool, including approvals related to invocation of the sovereign guarantee.
An underwriting committee has also been formed to ensure prudent, consistent and technically sound underwriting of risks ceded to the pool.
GIC Re will act as the pool administrator and will submit returns, details of re-insurance arrangements and statements on the performance of the pool.
Policies under the pool will be issued by domestic insurers that are pool members, using the combined underwriting capacity of the pool.
These risks will then be reinsured by all pool members in proportion to their capacity commitment in the pool.
For claims up to $100 million, the pool will service the claim using its own capacity.
For claims beyond $100 million, the sovereign guarantee will be invoked as a contingent backstop of last resort after complete exhaustion of the pool’s accumulated reserves, member contributions and reinsurance arrangements.
The ministry said the Bharat Maritime Insurance Pool will help ensure continuity of trade even in the event of withdrawal of re-insurance coverage due to sanctions or geopolitical tensions.
It said the mechanism will strengthen India’s maritime risk protection framework, support secure global trade operations and promote the country’s financial sovereignty.
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