India has built its own maritime insurance bridge, now ships will not stop even during war!

Kathmandu. India’s central government has taken a major step amid rising global tensions and rising risks to maritime trade.

The Union Cabinet chaired by Prime Minister Narendra Modi on Saturday approved the setting up of the India Maritime Insurance Bridge (BMI Bridge). The government has provided a sovereign guarantee of Rs 12,980 crore for this purpose.

The scheme aims to provide seamless and affordable insurance cover to Indian ships, Indian-controlled vessels and cargo vessels operating within and outside India.

What is the BMI bridge?

This is a domestic insurance structure. It is designed to provide continuous insurance coverage to Indian ships and cargo during times of global tensions (such as the West Asian crisis).

The Government of TAG_OPEN_li_58 India has provided a sovereign guarantee of Rs 12,980 crore for this.

• This plan will be for 10 years with an option to extend it for another 5 years.
• This will benefit Indian-flagged vessels, Indian-controlled vessels and vessels having source or destination India.

Why is necessary?

The Indian government’s move comes at a time when the West Asian conflict has disrupted global energy supply chains and increased risks to sea routes.

Currently TAG_OPEN_li_55, Indian ships are heavily dependent on foreign IG&I clubs for third-party liabilities (e.g. oil pollution, debris removal, crew injury).

TAG_OPEN_li_54 In the event of a war or sanctions, foreign companies often withdraw insurance coverage or significantly increase prices.

The bridge will ensure continuity of Indian trade irrespective of sanctions or geopolitical instability.TAG_OPEN_li_53

What risks will this bridge incur?TAG_OPEN_strong_42

According to India’s Union Minister Ashwini Vaishnaw, every seaplane needs insurance. This new bridge will cover a variety of risks:

• Damage to the hull and engines of the ship.
• Security of Cargo.
• Damage in war-affected areas.

{{TAG_OPEN_li_49}Legal liability to third parties.

{{TAG_OPEN_li_48}Oil pollution liability, collisions, debris removal, crew injuries and repatriation costs.

What will be the impact on the TAG_OPEN_strong_41 business?

In line with the Indian situation, local insurance is expected to reduce transportation costs.TAG_OPEN_li_47

• It will develop maritime actuarial, claims management and legal expertise in India.

Transit through unstable sea lanes such as TAG_OPEN_li_45 West Asia will not affect Indian trade.