The Union government on Saturday approved a proposal to set up a domestic insurance pool for the maritime sector, with a sovereign guarantee of Rs 12,980 crore to ensure continued coverage for Indian trade.
The decision was taken at a Cabinet meeting chaired by Prime Minister Narendra Modi.
Briefing reporters after the meeting, information and broadcasting minister Ashwini Vaishnaw said the government has approved the formation of 'Bharat Maritime Insurance Pool' for Indian flagged or controlled vessels or vessels destined to or starting from India, backed by a sovereign guarantee.
The pool ensures that Indian trade continues to have access to affordable insurance for vessels carrying cargo from any international origin to Indian ports and vice versa, even when transiting volatile maritime corridors.
According to the government, the pool will bring together insurers who will act as members and issue policies using a shared underwriting capacity of around Rs 950 crore.
The pool would cover all maritime risks like Hull and Machinery, Cargo, P&I and War risk. The policies will be issued by insurers that are Pool members, using the combined underwriting capacity of the pool, which would be around Rs 950 crore.
The move is expected to reduce dependence on foreign insurers and ensure continuity in insurance coverage for Indian shipping, especially during periods of disruption in global maritime routes.