When a ship sails into a war zone, standard marine insurance policies typically refuse to cover it. The vessel needs a separate "war risk" policy, and in today's West Asia crisis, with the Strait of Hormuz effectively blockaded by the US-Iran war, foreign insurers have been either withdrawing coverage entirely or charging rates so steep they make voyages commercially unviable.
An uninsured ship cannot legally operate or dock at any port in the world. For India, which depends on the Gulf for 87 per cent of its crude oil and close to 90 per cent of its LPG imports, this insurance gap becomes a live national security threat.
To plug this hole, the Department of Financial Services (DFS) under the Ministry of Finance launched the Bharat Maritime Insurance Pool (BMIP), India's own sovereign-backed domestic maritime insurance arrangement.
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The BMIP has a total underwriting capacity of $1.5 billion, backed by an Indian government sovereign guarantee of $1.4 billion (₹12,980 crore). The Union Cabinet had approved the pool's creation in April 2026, and the May 12 event marked its formal launch and first policy issuances.
The pool covers all four critical categories of maritime risk: Hull and Machinery, Cargo, Protection and Indemnity (P&I), and War Risk for Indian-flagged or Indian-controlled vessels, and for any vessel starting from or destined to an Indian port. GIC Re (General Insurance Corporation of India) acts as the pool administrator, while policies are issued by domestic insurers who are pool members, using their combined underwriting capacity.
At the launch, DFS Secretary M. Nagaraju handed over the first-ever Marine Hull and Machinery War Policy under BMIP to Hoger Offshore and Marine Private Limited, issued by the New India Assurance Co Ltd, providing financial protection against war perils while navigating through High Risk War Zones.
A Marine Cargo War Policy was simultaneously presented to Vedanta Sterlite Copper Ltd, covering its import of cable wires, and a policy was also issued to Balrampur Chini Mills Limited.
The claims architecture is designed in two tiers. For claims up to $100 million, the pool services them from its own accumulated reserves and member contributions. For claims exceeding $100 million, the sovereign guarantee is invoked.
This structure limits the government's direct fiscal exposure while providing the credible backing that private insurers need to remain in the market.
India's shipping sector has historically depended on the International Group of Protection and Indemnity (P&I) Clubs, a network of London-based mutual insurers, for third-party liability cover including oil pollution, wreck removal, crew injury and cargo damage. Foreign re/insurers can, and do, withdraw coverage when a vessel carries cargo from a sanctioned country or navigates a high-risk zone. BMIP is India's answer to that vulnerability. This way, the country can have sovereign control over maritime insurance, and that geopolitical decisions made in London, New York or Brussels cannot halt Indian trade.