India Launches Maritime Insurance Pool, Raises Allowances
India has approved a ₹129.8 billion ($1.4 billion) guarantee to establish a domestic maritime insurance pool aimed at safeguarding trade amid global uncertainties. The move comes as wars and sanctions have led major reinsurers to withdraw or limit coverage, creating risks for shipping and trade continuity. The pool, which will operate for 10 years with a possible five-year extension, will cover a wide range of maritime risks including cargo, hull and machinery, and war-related damages.
The initiative is designed to reduce dependence on foreign insurers and ensure stability in the shipping sector. With limited reinsurance support due to geopolitical tensions such as conflicts involving Iran and sanctions on Russia, the government sees this pool as essential for maintaining economic sovereignty. Member insurers will issue policies backed by a combined underwriting capacity of around ₹9.5 billion.
In a separate decision, the government also increased inflation-linked allowances by 2%, effective January 1. These allowances, revised twice a year based on the consumer price index, aim to cushion employees and pensioners against rising prices. India’s retail inflation rose to 3.40% in March, driven partly by higher cooking gas costs, though tax cuts have helped soften the impact of global oil price increases.
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