India has taken a historic step to secure its maritime trade amid rising geopolitical tensions across the world and increasing threats at sea. The Central Government on Saturday approved the formation of Bharat Maritime Insurance Pool (BMI Pool). This step will not only provide security to Indian ships but will also eliminate our dependence on foreign companies.
Taking a major decision in the Union Cabinet meeting held on Saturday, the proposal to create the country’s own Domestic Marine Insurance Pool (BMI Pool) has been given the green signal. The government has given a sovereign guarantee (government guarantee) of ₹12,980 crore for this pool. This means that even in difficult circumstances like war or tension, Indian ships will continue to get insurance cover without any interruption.
Why was this needed?
Currently Indian ships have to depend on international companies (such as London based clubs) for insurance. When war breaks out somewhere in the world or sanctions are imposed on a country, these foreign companies often refuse to provide insurance cover or raise prices drastically. This affects India’s import-export. To end this dependence and uncertainty, Modi government has made this masterstroke.
What will this insurance pool cover?
The ‘Bharat Maritime Insurance Pool’ will cover almost all risks associated with maritime trade, such as any physical damage to the vessel, safety and wreckage of vessels transiting through troubled sea lanes or war zones, loss of cargo, injury to crew or expenses for their return. This pool will cover all ships coming to or leaving India from any international country, even if they are passing through the most dangerous sea corridors in the world.
India’s shipping sector will become self-reliant
The total underwriting capacity of this pool will be approximately ₹950 crore, which will be jointly managed by the member insurance companies. Its biggest advantage will be that legal expertise and claim settlement related to insurance can now be done in India only. This step of the government will strengthen the Self-reliant India campaign and improve the global position of the Indian shipping industry.
Importance of Sovereign Guarantee
The main objective of the government giving a guarantee of ₹12,980 crore is that if any major disaster occurs at sea, the responsibility of paying the insurance amount will be on the Government of India. This will increase the confidence of investors and shipping companies and make India more resilient against any international sanctions.
SK Sharma is a content writer who writes on news, entertainment, and lifestyle topics. She has over four years of experience and is known for conveying information in simple and clear language.
