India’s maritime insurance pool won’t replace IG P&Is but will aid in uncertainty
COVERING vessels under the Bharat Maritime Insurance Pool is set to give India more flexibility in navigating maritime volatilities to maintain flows of imports amid crises such as in the Strait of Hormuz.
New Delhi last week launched the BMIP with a domestic pool of $1.5bn, consisting of a sovereign guarantee of $1.4bn to facilitate continuous maritime insurance coverage.
This pool will cover risks including hull and machinery, cargo, protection and indemnity, and war risk insurance for India-flagged or controlled vessels, or vessels transiting to or from India.
“By ensuring continuity of insurance coverage, even during periods of elevated geopolitical risk, the pool provides confidence to Indian shipowners, operators, and charterers to continue trading without disruption,” Indian Register of Shipping managing director PK Mishra told Lloyd’s List.
An urgent push for India’s own pool arose due to the situation in the Middle East Gulf, with crude oil imports choked since the crisis broke.
The MEG accounted for 47.6% of Indian imports in 2025, according to data from Vortexa.
And between December 2025 and February 2026, this rose 10 percentage points to 57.4% as India replaced Russian barrels with MEG barrels to get a favourable trade deal with the US.
But the closure of Hormuz forced India to resume importing Russian barrels, with relaxations of sanctions from the US.
Waiver complications
The US yesterday extended its waiver of sanctions on Russian barrels for a third time since the crisis began, allowing countries like India to alleviate the supply shortage with Russian barrels.
The UK similarly relaxed sanctions on diesel and fuel refined from Russian crude oil overseas yesterday, because of current shortages.
But even with these waivers, major insurance companies are choosing against insuring vessels carrying Russian crude oil.
Reuters last month reported that India had increased the pool of Russian insurers allowed to cover ships travelling to India from eight to 11 as it increased imports of Russian crude.
Traditional insurers have pulled back from covering ships carrying Russian crude, leaving others to step in as the EU holds its hard line even while the US eases restrictions. Twenty-three non-IG P&I clubs from various countries are currently permitted by India’s Directorate General of Shipping.
These complications created demand for sovereign cover to shield owners from sanctions‑related risk.
“It acts as an alternative to foreign P&I club and insurers with the aim to protect Indian shipping from volatile premiums, sudden loss of coverage, a resilient buffer against sanctions and geopolitical crises,” Phoenix Legal partner Gautam Bhatikar told Lloyd’s List.
New Delhi similarly highlighted the “dependence of Indian vessels on International Group P&I clubs for P&I insurance” as an area of concern in a statement last week.
“Due to sanctions, foreign re/insurers can withdraw support for any insurance policy that covers cargo or vessel carrying cargo, from the sanctioned country.”
Having its own insurance pool will give India the flexibility to navigate sanctions complications brought on by geopolitical volatilities.
A European club insider told Lloyd’s List that the pool is “a way for India to use other markets such as Russia” given traditional clubs’ resistance to cover vessels involved in importing Russian crude oil.
“They are seeking to gain some independence to make their own decisions.”
Formation of the pool
Before the current crisis, India began pursuing its ambitions to strengthen its blue economy through its Maritime Amrit Kaal Vision 2047.
It aims to centralise shipping in India given its growing presence in maritime trade. While shipbuilding formed a major part of the initial plan, the Hormuz crisis accelerated the maritime insurance aspect.
New Delhi commissioned a governing body to oversee the pool, with an underwriting committee formed to price risks. GIC Re was appointed pool administrator.
Policies will be issued by domestic insurers that are pool members, using the combined underwriting capacity of the pool. These risks are then reinsured by all pool members, in proportion to their capacity commitment.
Claims up to $100m will be met by the pool, with the sovereign guarantee triggered only after reserves, member contributions and reinsurance are exhausted.
BMIP Coverage began last week, in contrast to the US war risk insurance scheme which has yet to do any business.
Hoger Offshore and Marine was covered with marine hull and machinery war policy, issued by the New India Assurance. Marine cargo war policies were also issued to Vedanta Sterlite Copper and Balrampur Chini Mills.
Teething issues
India’s domestic pool is currently seen by the industry as complementary to traditional cover, to provide an “assurance of continuity when market responses become restrictive”, Mishra said.
“The creation of a sovereign‑backed pool significantly mitigates systemic risk by providing a fallback mechanism when global markets tighten abruptly.”
But it could take a while for trust between counterparties and parties under Indian cover to be established.
“Initially, foreign ports, charterers, banks, financiers and counterparties are likely to adopt a cautious approach, particularly because the global maritime ecosystem has historically relied heavily on IG P&I clubs and established London market structures,” Bhatikar said.
In his view, the practical value of cover lies beyond existence of cover. “International confidence in enforcement, recoverability and claims-handling capability” would also be required, according to Bhatikar.
The European club insider shared a similar view: “Most banks, contracts, counterparties as well as port access, you name it, are intimately connected with being able to show IG P&I cover. It will take time to gain the recognition to be able to trade under this cover, in particular on the liability/P&I side.”
They too expect more success on the war and cargo aspect of the BMIP.
While experts see BMIP as being complementary to IG P&I cover, New Delhi stated that the pool will be able to “provide sufficient underwriting capacity to cover the risks adequately and enable the country to increase sovereign control over maritime trade.”