How India is building its own Maritime Safety Net

In today’s episode on 21st May 2026, we talk about the Bharat Maritime Insurance Pool that was recently announced. Book a FREE call with Ditto https://ditto.sh/vx51ji

• 0:01Speaker 00

  Hello folks, you're tuned into Finshots Daily. In today's episode, we talk about the Bharat Maritime Insurance Pool that was recently announced.

• 0:11Speaker 00

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• 0:53Speaker 00

  A few weeks ago, something unusual happened quietly in the background of global trade. India expanded the number of Russian insurers whose marine insurance coverage can be accepted at Indian ports. Soon after, the government launched something called the BMIP, that is Bharat Maritime Insurance Pool. It's a 1.5 billion dollars, that's about 12,980 crore rupees currently, insurance agreement, which is supported by government guarantee meant to insure ships and cargo when global insurers are unwilling or unable to do so. If that feels complicated, let's give it some context. When ships enter Indian ports, they need marine insurance.

• 1:34Speaker 00

  Earlier, India mostly accepted insurance from global players, many of which were Western firms. But after sanctions on Russia, several Russian ships and insurers faced restrictions. But India expanded the list of Russian insurance companies whose policies Indian ports would accept. This means that if a Russian ship had insurance from certain Russian insurers, India would still allow it to dock it at Indian ports. But here's the thing, a staggering 70% of India's trade by volume and 95% by value moves through maritime corridors. Basically, almost everything India buys or sells internationally. Think enormous quantities of crude oil, LNG, fertilizers and industrial commodities travels by sea.

• 2:16Speaker 00

  If shipping insurance becomes uncertain during geopolitical stress, the physical movement of these goods becomes uncertain too. And this vulnerability is more serious than it appears. In marine insurance, war risk coverage can often be withdrawn with very short notice if geopolitical conditions deteriorate suddenly. That means a conflict escalation in critical trade corridors such as the Strait of Hormuz or the Red Sea could, in theory, disrupt coverage for ships carrying vital cargoes to India within days. For a country deeply dependent on imported energy and commodity flows, relying entirely on foreign control insurance systems poses a strategic risk that may only become apparent in moments of crisis. And that's where the idea of BMIP fits in.

• 3:01Speaker 00

  India wanted more control over the financial plumbing of trade. Because if Western insurers stop covering certain ships because of sanctions or geopolitical tensions, India still wants trade to continue without getting stuck. BMIP has a two-tiered system in which smaller insurance claims are handled by the insurers in the pool and reserves managed by GICRE. But if a claim crosses hundred million dollars, the government steps in with a guarantee. The insurance covers things like ship damage, lost cargo, oil spills and even risks linked to ships traveling through conflict zones. And it's not just for Indian ships, by the way. Even foreign vessels carrying goods to or from Indian ports can use it.

• 3:42Speaker 00

  So you could say that India is effectively trying to build a domestic maritime safety net before the next global disruption arrives. There's another layer too, foreign exchange. Until now, a large share of India's marine insurance coverage has been handled by foreign insurers, which means premiums are often paid in US dollars. At first, that may not sound like a problem, but over time, these outflows become a form of capital export. For instance, places like London, Singapore, the Nordic countries and increasingly China have built strong industries around insurance, reinsurance, shipping law and shipping finance. So even when goods don't pass through these A big chunk of the money and financial activity linked to global trade, including India's, still flows through them.

• 4:26Speaker 00

  So, in many ways, India is trying to avoid that and move up the globalization value chain. And insurance sits at the centre of that because it ultimately runs on trust. After all, one accident or geopolitical crisis can suddenly lead to billions of dollars in losses. That's why the government's backing of the BMIP matters. By offering a 1.5 billion dollars guarantee, India is essentially telling shipping companies and insurers that this system will still work even during crisis. The aim is to build a stronger domestic shipping insurance ecosystem and reduce dependence on foreign players during geopolitical disruptions. But money alone won't make it work. When billions of dollars of cargo are moving across oceans, shipping companies want certainty around insurance coverage.

• 5:09Speaker 00

  That means India will need more than a sovereign guarantee to build trust in the system, and that could be the real challenge. Indian financial markets have at times seen policy shifts that changed investor expectations. So, for the BMIP to gain credibility, long-term policy stability may matter just as much as government backing. Established hubs like London and Singapore then become global shipping insurance centres overnight. They spend decades building talent, expertise and trust. So, if India wants the BMIP to become a globally trusted platform and not just a domestic backup, it will need to invest not just money but also skilled people and strong intuitions. Because once weakness in a system becomes obvious, building alternatives quickly is hard, and that is why this move matters.

• 5:54Speaker 00

  At its core, India isn't just building an insurance mechanism. It's trying to bring more of the financial systems that support global trade closer to home as its role in world trade grows. And in an increasingly fragmented world, that may become just as strategically important as the trade itself. All right, folks, I'll see you the next one. Thank you for listening to today's episode. And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.