The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the creation of the Bharat Maritime Insurance Pool (BMI) with a sovereign guarantee of ₹12,980 crore.
This initiative is designed to provide uninterrupted insurance coverage for Indian-flagged, India-bound and India-originating vessels, strengthening maritime trade resilience and reducing dependence on foreign insurers.
The move comes against the backdrop of rising geopolitical tensions and global volatility, which have driven up insurance costs and raised concerns about the availability of coverage.
The government stated that the pool will ensure affordable insurance access for ships carrying cargo to and from India, including those navigating high-risk maritime routes. India has traditionally relied on global Protection and Indemnity (P&I) clubs for third-party liability coverage, encompassing risks such as oil spills, cargo damage, crew injury and collisions. The BMI pool seeks to reduce this reliance and safeguard trade in the event of sanctions or geopolitical disruptions.
Coverage under the pool will extend to key maritime risks, including hull and machinery, cargo, P&I and war risk. Member insurers will issue policies using a combined underwriting capacity of about ₹950 crore.
The sovereign guarantee is intended to bolster self-reliance, improve resilience to sanctions, and ensure greater sovereign control over critical maritime insurance.
The government also emphasised that the initiative will help build domestic expertise in marine underwriting, claims management and legal processes, while tailoring insurance offerings to Indian shipping conditions and regulatory requirements. A governing body will be established to oversee the pool’s operations, ensuring accountability and strategic alignment with national priorities.
Earlier on the same day, several oil tankers, including multiple Indian-linked vessels, abruptly altered course in the Persian Gulf amid uncertainty over transit conditions through the Strait of Hormuz.
Reports indicated that at least six tankers, including Indian-flagged ships Sanmar Herald, Desh Garima, Desh Vaibhav and Desh Vibhor, were part of a flotilla attempting to move northeast toward the strait from waters off Dubai before turning back or halting.
These vessels, carrying non-Iranian crude, were caught in confusion as shipowners and traders assessed whether Iran would uphold its assurance that the key energy chokepoint would remain open.
Some ships were later observed idling near Iran’s Qeshm island after reversing course, while at least one vessel stopped transmitting location data, further deepening uncertainty around regional movements. Bloomberg reported that the flotilla collectively held millions of barrels of crude, and their successful passage would have represented one of the highest single-day flows since the conflict began.
It remains unclear whether the U-turns were deliberate decisions by operators to abort transit or the result of traffic management and security protocols, as multiple vessels converged near the narrow passage.
Adding to the confusion, shipowners reportedly received radio warnings suggesting that passage could still require clearance from Iranian authorities, despite public statements indicating the strait was open.
ET News
