The Indian government has approved a major initiative to strengthen the country’s maritime trade security by launching a new domestic insurance mechanism called the Bharat Maritime Insurance Pool (BMI Pool).
The scheme comes with a sovereign guarantee of Rs 12,980 crore and is aimed at ensuring uninterrupted insurance coverage for Indian ships and cargo during times of global uncertainty.
Why India Needs A Domestic Maritime Insurance Pool
The approval of the BMI Pool follows growing geopolitical tensions, rising sanctions risks, and disruptions in global shipping routes. These factors have led to sharp increases in insurance premiums worldwide and raised concerns about the availability of reliable maritime coverage.
India has traditionally depended on international insurance providers, particularly the International Group of Protection and Indemnity Clubs, for essential maritime risk coverage.
However, officials noted that such reliance exposed Indian trade to the danger of sudden withdrawal of services during conflicts or sanctions.
With the new scheme, India aims to create a self-reliant insurance ecosystem capable of supporting its shipping sector even during periods of instability.
What The BMI Pool Will Cover
The Bharat Maritime Insurance Pool (BMI Pool) will offer insurance coverage to:
- Indian-flagged vessels
- Indian-controlled ships
- Ships carrying cargo to or from India
- Vessels navigating high-risk or volatile maritime routes
The scheme will provide protection against a wide range of maritime risks, including:
- Hull and machinery damage
- Cargo-related risks
- Protection and indemnity liabilities
- War-risk insurance
Policies under the scheme will be issued by member insurers with a combined underwriting capacity of approximately Rs 950 crore.
Boost To Domestic Expertise And Forex Savings
Beyond providing immediate risk protection, the government said the new insurance pool would help India develop domestic expertise in marine underwriting, claims management, and maritime legal processes.
Another key benefit highlighted was the potential reduction in foreign exchange outflow. Currently, a significant portion of insurance premiums is paid to foreign insurers. By shifting coverage to domestic institutions, India expects to retain more financial resources within the country.
Duration And Strategic Importance
The BMI Pool will initially operate for a period of 10 years, with an option to extend it by an additional five years depending on its performance and future needs.
The move comes at a time when maritime routes, particularly in West Asia, remain vulnerable to conflict-related disruptions. Insurers have increasingly begun issuing policies on a case-by-case basis at higher premiums, making the need for a reliable domestic solution more urgent than ever.
Officials believe the scheme will play a crucial role in protecting India’s trade continuity and strengthening its maritime resilience in an increasingly uncertain global environment.