What is Bharat Maritime Insurance Pool?

• The Union Cabinet has approved the creation of a domestic maritime insurance pool with a sovereign guarantee of Rs 12,980 crore. 

• The proposed ‘Bharat Maritime Insurance Pool’ (BMI Pool) will provide comprehensive coverage across key segments — hull and machinery, cargo, protection and indemnity (P&I), and war risk — for Indian-flagged and Indian-controlled vessels, including those operating in conflict-prone international waters.

• This is aimed at insulating India’s maritime trade from global volatility. 

What is the significance of BMI Pool?

• India’s maritime sector handles over 70 per cent of the country’s trade by volume and nearly 95 per cent by value, yet insurance coverage for this vast ecosystem has largely remained in foreign hands. 

• This structural vulnerability became evident during recent disruptions in key shipping corridors such as the Red Sea, Strait of Hormuz and the Gulf of Oman, when several global insurers sharply increased premiums or withdrew coverage altogether, exposing Indian exporters and shipping operators to heightened financial risk and operational uncertainty. 

• The BMI Pool is designed to address this gap by ensuring continuity of coverage regardless of geopolitical developments, thereby stabilising trade flows and reducing cost pressures on exporters and logistics stakeholders.

• The pool will extend insurance protection to vessels carrying cargo between international ports and India in both directions. 

• It will cover the physical structure of ships under hull and machinery insurance, protect goods in transit through cargo insurance, and address third-party liabilities such as crew injury and environmental damage under protection and indemnity (P&I) coverage. 

• In addition, it will provide war risk insurance for vessels operating in conflict zones and high-risk maritime corridors, ensuring Indian shipping remains operational even in volatile regions.

• The move aligns India with major maritime nations such as the United Kingdom, Japan and South Korea, which have already established state-supported insurance frameworks to safeguard national trade interests. 

• The initiative also fits within the broader Maritime India Vision 2030, which identifies the development of robust insurance infrastructure as a key pillar in positioning India as a leading global maritime power.