Why in news?
India has launched the Bharat Maritime Insurance Pool with a government guarantee of ₹12,980 crore (around $1.6 billion). The initiative is designed to ensure uninterrupted marine insurance for Indian ships and cargo during global crises and sanctions.
Background
Shipping is vital to India’s trade, but insurers can withdraw coverage during wars or sanctions, leaving vessels and cargo uninsured. The withdrawal of reinsurers during recent conflicts highlighted this vulnerability.
The BMI Pool is a risk‑sharing arrangement among Indian insurers with a sovereign guarantee. It has two components: a general pool covering hull, machinery, cargo and third‑party liability, and a war‑risk pool for conflict‑related losses. The scheme supports both Indian‑flagged vessels and foreign ships carrying Indian cargo.
Key features of the BMI Pool
- Sovereign guarantee: The government provides a guarantee of ₹12,980 crore to back the pool, enabling insurers to underwrite large risks.
- War‑risk coverage: A separate arm, the Bharat Marine Pool, covers war‑related losses with support equivalent to around $1.5 billion.
- Broader scope: The pool can insure vessels for voyages through high‑risk waters, cargo in conflict zones and liability arising from third parties.
- Self‑reliance: By developing domestic underwriting capacity, India reduces dependence on foreign insurers and enhances the resilience of its maritime sector.
Implications
The pool helps maintain trade flows even when international insurers retreat. It aligns with the Maritime India Vision 2030 to strengthen the shipping industry. The move may also encourage Indian owners to register vessels domestically rather than in foreign jurisdictions.