Tuesday Apr 21, 2026
Tuesday Apr 21, 2026
Monday, 20 April 2026 03:35 - - {{hitsCtrl.values.hits}}
MUMBAI: India has approved a maritime insurance pool of INR 129.8 billion ($ 1.4 billion), Information and Broadcasting Minister Ashwini Vaishnav said on Saturday. The pool is for 10 years can be extended to five more years, Vaishnav said in a briefing. The fund comes at a time when the Iran war has increased the risks to shipping and hiked up insurance costs for businesses.
Union Minister Sarbananda Sonowal captured both the urgency and ambition of the move at the outset. “For decades, Indian shipping has remained exposed to external uncertainties dictated by foreign insurance markets. Now, under the visionary and decisive leadership of Prime Minister Narendra Modi, this landmark decision ensures that India now has the sovereign capacity to safeguard its maritime trade, even in the most challenging global scenarios,” he said.
“This is not just an insurance mechanism; it is a statement of India’s growing confidence and capability. With the bold and dynamic leadership of Prime Minister Narendra Modi, India is building resilient systems that protect national interests while enabling global trade leadership,” he added.
Those remarks frame the BMI Pool for what it is: not simply an industry reform, but a strategic assertion. In a world where maritime chokepoints increasingly double as geopolitical pressure valves, the ability to insure one’s own shipping is no longer a technical matter; it is an expression of economic sovereignty.
At its core, the BMI Pool addresses a long-standing asymmetry.
India conducts roughly 95% of its trade by volume via sea, yet the risks associated with that trade, especially in volatile regions like the Strait of Hormuz or the Red Sea, have historically been priced and managed by foreign insurers.
These insurers, largely concentrated in London-based Protection and Indemnity (P&I) clubs, respond to geopolitical instability with predictable caution: premiums spike, coverage narrows, or in extreme cases, protection is withdrawn altogether. The result is a cascading effect on Indian shipping costs, energy imports, and ultimately, domestic inflation.
The BMI Pool directly intervenes in this dynamic by introducing a sovereign-backed alternative that prioritises continuity over profit-maximising volatility. Unlike commercial insurers that recalibrate risk exposure in real time, the Pool is structured to ensure that essential maritime trade does not grind to a halt during crises. Insurance, in this context, becomes a guarantee of movement as much as a hedge against loss.
This emphasis on “sovereign capacity”, highlighted by Sonowal, is not a rhetorical flourish. The global maritime insurance market is highly concentrated, with 90% of ocean-going tonnage covered by the 12-member International Group (IG) of P&I Clubs. This effectively renders countries like India “price-takers”, subject to a layered risk architecture they do not control.
By internalising underwriting and claims management, the BMI Pool begins to reverse that dependency. It also enables India to retain a share of premium outflows, estimated between ₹125 crore and ₹330 crore annually, while building domestic expertise in a specialised and strategically vital domain.
