Source : INDIA TODAY NEWS
India has taken a decisive step to shield its trade from global shocks by approving a new insurance mechanism for the shipping sector. The government has cleared the creation of the Bharat Maritime Insurance Pool, backed by a sovereign guarantee of Rs 12,980 crore.
Hence, the move comes at a time when geopolitical tensions are disrupting key global shipping routes and exposing India’s dependence on foreign insurers. The aim is clear: ensure that Indian ships and cargo remain insured, even when global markets turn volatile.
WHAT IS THE BHARAT MARITIME INSURANCE POOL?
The Bharat Maritime Insurance Pool, or BMI Pool, is a government-backed insurance system that will provide risk coverage to India’s maritime ecosystem. It is designed for Indian-flagged as well as Indian-controlled vessels operating both domestically and internationally.
So far, a large part of India’s marine insurance has been handled by foreign underwriters. This has meant that during global crises, insurance availability and pricing were often beyond India’s control.
With the BMI Pool, the government is creating a domestic framework to ensure continuity of insurance coverage, regardless of global market conditions.
Shipping Minister Sarbananda Sonowal called the move transformational, saying it gives India the sovereign capacity to safeguard its maritime trade under the leadership of Narendra Modi.
WHY HAS INDIA LAUNCHED IT NOW
India’s maritime sector is critical to its economy. It handles more than 70% of the country’s trade by volume and nearly 95% by value. Despite this, insurance for this vast network has largely been dependent on global players.
Recent disruptions in regions such as the Red Sea, Strait of Hormuz and Gulf of Oman have highlighted the risks of this dependence.
During these disruptions, several global insurers either raised premiums sharply or withdrew coverage altogether. This left Indian exporters and shipping operators exposed to higher costs and uncertainty.
The BMI Pool is intended to act as a buffer against such situations, ensuring that insurance remains available even during geopolitical crises.
WHAT EXACTLY WILL THE BMI POOL COVER
The new insurance pool has been designed to provide comprehensive, end-to-end coverage across key segments of maritime risk.
It will cover hull and machinery insurance, which protects ships against physical damage or loss. Cargo insurance will cover goods being transported between India and international ports in both directions.
The pool will also provide protection and indemnity, or P&I coverage, which handles third-party liabilities. This includes risks such as crew injury, environmental damage and other legal liabilities arising from maritime operations.
Importantly, the BMI Pool will include war risk insurance. This is crucial for vessels operating in conflict-prone or high-risk areas, where traditional insurers often either withdraw or charge extremely high premiums.
By including war risk coverage, the government is ensuring that Indian ships can continue operating in volatile global corridors without disruption.
The biggest impact of this move is likely to be stability.
With a domestic insurance mechanism in place, Indian shipping companies will be less exposed to sudden premium spikes driven by global events. Exporters could also benefit from more predictable logistics costs.
The government expects the pool to reduce dependence on foreign insurance cycles and protect trade flows from geopolitical shocks.
In effect, it gives India greater control over a critical part of its trade infrastructure.
The Bharat Maritime Insurance Pool is part of a broader push to strengthen India’s maritime capabilities. It aligns with the Maritime India Vision 2030, which aims to build a robust and self-reliant maritime ecosystem.
Officials have pointed out that countries such as the United Kingdom, Japan and South Korea already have similar state-backed insurance frameworks to protect their shipping industries.
With this move, India is joining that group, signalling a shift towards strategic self-reliance in global trade.
– Ends
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SOURCE :- TIMES OF INDIA
