The Union Government has recently approved the creation of the Bharat Maritime Insurance Pool (BMI Pool) to protect India’s seaborne trade from global disruptions. The move comes amid rising geopolitical tensions, supply chain uncertainties, and increasing risks in
international shipping routes.
About BMI Pool
The Bharat Maritime Insurance Pool is a Centre-backed domestic maritime insurance mechanism designed to ensure uninterrupted and affordable insurance coverage for India’s shipping sector. It aims to reduce dependence on foreign insurers and enhance resilience
during global crises such as wars, sanctions, or disruptions in key maritime routes.
The scheme is supported by a sovereign guarantee of ₹12,980 crore, reflecting the government’s commitment to safeguarding maritime trade and strategic economic interests.
Key Features
- Coverage Scope:
The BMI Pool will provide insurance for Indian-flagged vessels, Indian-controlled ships, and vessels carrying cargo to or from India, including those passing through high-risk or volatile maritime zones.
- Types of Insurance Covered:
It offers comprehensive coverage, including:
- Hull and machinery insurance
- Cargo insurance
- Protection and indemnity (P&I) insurance
- War risk insurance
- Duration:
The scheme will operate initially for 10 years, with a provision for a 5-year extension, ensuring long-term stability.
- Government Support:
Backed by sovereign guarantee, it ensures financial strength and credibility, especially during crises when global insurers may withdraw or increase premiums.
Need for the Scheme
India’s economy is heavily dependent on maritime trade, with nearly 90% of trade by volume
carried through sea routes. However, global shipping faces multiple risks:
- Geopolitical conflicts affecting major shipping lanes
- Piracy and security threats
- Sanctions and insurance withdrawal by global players
- Rising insurance premiums in high-risk zones
The BMI Pool addresses these vulnerabilities by creating a domestic risk-sharing mechanism.
Significance
- Trade Security: Ensures uninterrupted movement of goods even during global disruptions.
- Self-Reliance: Reduces dependence on foreign marine insurers, aligning with
Atmanirbhar Bharat.
- Cost Stability: Helps stabilise insurance premiums during crises.
- Capacity Building: Develops domestic expertise in underwriting, risk assessment, and claims management.
- Strategic Autonomy: Strengthens India’s ability to manage maritime risks independently.
Challenges
- Building sufficient technical expertise in marine insurance
- Managing high-risk claims, especially war-related losses
- Ensuring financial sustainability of the pool
- Coordination among insurers and stakeholders
Way Forward
- Strengthen public-private partnerships in insurance
- Invest in risk modelling and maritime data systems
- Align with global maritime standards and best practices
- Gradually expand coverage and capacity
Conclusion
The Bharat Maritime Insurance Pool represents a strategic step towards securing India’s maritime trade and enhancing economic resilience. By ensuring reliable insurance coverage during uncertain times, it not only protects trade flows but also contributes to India’s long-term goal of becoming a major global maritime power.