Will provide insurance to all vessels coming to or going from India: DFS Secretary Nagaraju

Vedanta Sterlite, Balrampur Sugar, and Hoger Offshore are the first three beneficiaries of the launched Tuesday. Addressing journalists at an event to unveil the pool, Secretary Financial Services, M Nagaraju said this will bridge a crucial gap for India’s maritime trade which was till now dependent on foreign insurers.

The secretary handed over the first Marine Hull & Machinery War Policy document to Hoger Offshore and issued by the , providing financial protection against war perils while navigating through High-Risk War Zones. A Marine Cargo War Policy was presented to Vedanta Sterlite copper Ltd., covering its import of cable wires. Another policy was issued to Balrampur Chini Mills Limited, an official statement said.

“We will insure vessels coming to India or going from India to any part of the world, that includes West Asia also,” Nagaraju said.

Vessel movement across the Strait of Hormuz came to a standstill after insurers and underwriters increased war risk premiums amidst the Iran crisis. This severely affected global trade with shipping companies passing on higher costs to consumers.

Addressing these concerns, the Union Cabinet approved creation of a domestic maritime insurance pool with a of $ 1.5 billion last month. This aimed at insulating India’s maritime trade from global volatility.

“This is not a profiteering exercise,” Nagaraju said, explaining this pool will bring assurance to India’s maritime trade.

The pool with sovereign guarantee will be able to provide sufficient underwriting capacity to cover the risks adequately and enable the country to increase sovereign control over maritime trade, the statement added.

Bharat Maritime Insurance Pool (BMI Pool) provides coverage across hull and machinery, cargo, protection and indemnity (P&I), and war risk for Indian-flagged and Indian-controlled vessels.

“For claims arising up to $100 million, the pool will service the claim using its own capacity,” the statement said. For claims beyond this amount, the sovereign guarantee will be invoked to service claims as a contingent backstop of last resort. This will be invoked after complete exhaustion of the pool’s accumulated reserves, member contributions and reinsurance arrangements.