In a major development for India's maritime sector amid ongoing tensions in the Strait of Hormuz, the PM Modi-led Union Cabinet on Saturday gave the green light for the 'Bharat Maritime Insurance Pool'.
The sovereign-backed maritime insurance scheme, with a coverage amount of Rs 12,980 crore, aims to provide continuous, affordable, and reliable insurance for Indian vessels bearing the brunt of geopolitical risks while travelling through sensitive naval areas.
The domestic insurance pool is also expected to reduce India’s dependence on foreign insurers (such as insurance giants like the International Group of P&I Clubs) and ensure uninterrupted trade at sea—especially through volatile corridors like the Strait of Hormuz.
This comes after the war between Iran and US-Israel forces spread a wave of uncertainty in the region, with the crucial waterway being blocked and reopened based on the current state of ties, as well as with the presence of US Navy warships in the region, amid Washington's naval blockade of the strait.
Most recently, reports claimed that two Indian-flagged vessels, the bulk carrier Jag Arnav (IMO: 9705354) and the crude oil tanker Sanmar Herald (IMO: 9330563) had faced fire from the naval forces of Iran's Islamic Revolutionary Guard Corps (IRGC) while trying to exit the Strait of Hormuz.
This has led to a strong protest from the Ministry of External Affairs (MEA), which has summoned Iranian envoy Dr Mohammad Fathali to discuss the incident further.
The new domestic pool will cover a number of maritime risks associated with major areas such as hull and machinery, cargo, P&I, and war risk.
Under the new framework, multiple domestic insurers will combine their financial strength to form a shared pool.
Information and Broadcasting Minister Ashwini Vaishnaw also noted that public sector reinsurer General Insurance Corporation of India (GIC Re) would serve as the administrator of the domestic pool.
He added that GIC Re would contribute around Rs 400 crore, public sector general insurance companies would put in about Rs 280 crore, and the remainder would come from private sector insurers and oil marketing companies.
The maritime insurance pool, which itself will have an underwriting capacity of Rs 950 crore, will be controlled by a government body.
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