India has launched the Bharat Maritime Insurance Pool (BMI Pool), backed by a government guarantee, to ensure continued insurance cover for ships and cargo amid geopolitical tensions and sanctions risks.
The pool will cover hull and machinery, cargo, protection and indemnity (P&I), and war risk insurance for Indian-flagged vessels, Indian-controlled ships, and cargo linked to India, including shipments through high-risk maritime routes.
In a separate move, the government raised dearness allowance and dearness relief by 2% from January 1 to help offset inflation, with retail inflation rising to 3.40% in March.
India Unveils ₹130 Billion Maritime Insurance Shield as Sanctions and Wars Threaten Trade
Government-backed Bharat Maritime Insurance Pool aims to protect shipping and trade flows as geopolitical tensions and sanctions risks disrupt global insurance markets
OECD
Summary
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India has approved a ₹129.8 billion ($1.4 billion) government-backed guarantee for a new maritime insurance mechanism, the Bharat Maritime Insurance Pool (BMI Pool), aimed at protecting trade flows as wars, sanctions, and geopolitical tensions disrupt global shipping insurance markets.
Union Minister Ashwini Vaishnaw said on Saturday that the pool will operate for 10 years, with an option to extend it by an additional five years. The initiative comes amid growing concerns that international insurers may withdraw coverage for ships operating in high-risk regions, threatening the continuity of trade.
“There was a need for a domestic maritime risk covering pool to maintain sovereignty and continuity of trade in the face of withdrawal of coverage due to sanctions or geopolitical tensions,” the government said in an official statement.
The BMI Pool will provide comprehensive coverage across key maritime risk categories, including hull and machinery, cargo, protection and indemnity (P&I), and war risk insurance. The move follows a period of heightened geopolitical instability, sanctions risks, and disruptions to shipping routes that have driven up global insurance premiums and increased uncertainty for shipowners and exporters.
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India has traditionally relied on international insurers, particularly the International Group of Protection and Indemnity Clubs, for critical maritime coverage. According to reports, this dependence has exposed Indian trade to the risk of sudden withdrawal of insurance support during conflicts or sanctions-related disruptions.
The new pool will provide insurance support to Indian-flagged vessels, Indian-controlled ships, and vessels carrying cargo to or from India, including those transiting volatile maritime routes. Policies will be issued by participating insurers drawing on a combined underwriting capacity of around ₹9.5 billion.
In a separate development, the government also increased inflation-linked allowances by 2%, effective January 1, according to a Reuters report.
Dearness allowance (DA) and dearness relief (DR) are periodic payments made to government employees and pensioners to offset the impact of inflation. These allowances are typically revised twice a year based on movements in the consumer price index (CPI).
Inflation pressures have been influenced by higher cooking gas prices, although government tax cuts have cushioned consumers from the full impact of rising global oil prices. India’s retail inflation rose to 3.40% year-on-year in March, compared with 3.21% in February, according to official data released earlier this month.
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In a separate development, the government also increased inflation-linked allowances by 2%, effective January 1, according to a Reuters report.
Dearness allowance (DA) and dearness relief (DR) are periodic payments made to government employees and pensioners to offset the impact of inflation. These allowances are typically revised twice a year based on movements in the consumer price index (CPI).
Inflation pressures have been influenced by higher cooking gas prices, although government tax cuts have cushioned consumers from the full impact of rising global oil prices. India’s retail inflation rose to 3.40% year-on-year in March, compared with 3.21% in February, according to official data released earlier this month.