The Union Cabinet chaired by the Prime Minister Narendra Modi approved creation of the Bharat Maritime Insurance Pool to provide continuous cover for vessels linked to Indian trade. The cabinet sanctioned a sovereign guarantee of Rs 129.8 billion (Rs 129.8 bn) to support the pool. The measure aims to secure affordable insurance for vessels carrying cargo from any international origin to Indian ports and from Indian ports to overseas destinations. It is intended to operate when vessels transit volatile maritime corridors.

The pool will cover Hull and Machinery, cargo, Protection and Indemnity and war risk, with Protection and Indemnity defined as P&I. Policies will be issued by insurers that join as pool members using combined underwriting capacity estimated at around Rs 9.5 billion (Rs 9.5 bn). The arrangement is designed to reduce reliance on international clubs and to address withdrawal of cover due to sanctions or geopolitical tension. Coverage will apply to Indian flagged or controlled vessels and to ships destined to or starting from India.

The government indicated domestic management of liability insurance will permit tailoring of cover to Indian shipping conditions and regulatory requirements and will foster specialised marine underwriting, claims management and legal expertise within the country. A governing body for the pool will oversee formation, functioning and operational norms. The sovereign guarantee was framed as a means to strengthen self reliance, sanctions resilience and sovereign control over maritime risk. The pool is intended to ensure continuity of trade and reduce uncertainty arising from global volatility.

The step follows concern about rising insurance costs and the impact of geopolitical instability on maritime trade, which increased risk of losses for cargo and vessels. The government envisages the pool will help maintain availability of cover and support Indian shipping and trade interests. Implementation details and membership modalities will be finalised by the governing body and participating insurers. The initiative forms part of wider efforts to bolster domestic capabilities in the maritime sector.