The Bharat Maritime Insurance Pool (BMIP), a government initiative, is set to function as a strategic complement to existing international maritime insurance coverage, rather than a direct replacement. Industry experts highlight that achieving global recognition for BMIP will be a gradual process, requiring demonstrated performance and a track record of credible claims settlement.
Complementing, Not Replacing, Global Coverage
Gautam Bhatikar of Phoenix Legal explains that certificates issued by international Protection and Indemnity (P&I) Club members carry significant legal weight across major global ports and arbitration forums. This established framework means BMIP will initially serve as a valuable addition to, rather than a substitute for, existing international policies.
Aliasgar Hajee, CEO of Shipbuilding and Ship Management at SHM Group, suggests that most shipowners will evaluate BMIP as part of a broader risk management strategy. Decisions around insurance coverage are influenced by various factors, including operational requirements, trading routes, lender expectations, and regulatory considerations. The market will, over time, determine the optimal balance between domestic and international solutions.
Strategic Value in Volatile Regions
The immediate and potentially indispensable value of BMIP becomes apparent in scenarios where international coverage is withdrawn or becomes commercially unviable. A prime example is war-risk coverage in volatile corridors such as the Red Sea and the Strait of Hormuz. In such situations, BMIP could serve as the only viable alternative, ensuring that Indian trade is not held hostage to decisions made in foreign insurance markets due to geopolitical developments.
“In such situations, BMIP serves not merely as a complement but as the only viable alternative, ensuring that Indian trade is not held hostage to decisions made in foreign insurance markets in response to geopolitical developments entirely outside India’s control. That function alone justifies its existence,” says Gautam Bhatikar.
A Maritime Sovereignty Initiative
Harsh B. Buch, founding partner at Orion Counsel, emphasizes that the BMIP should be viewed beyond a mere insurance initiative; it represents a crucial step towards maritime sovereignty. For decades, Indian shipping has faced a fundamental vulnerability due to its over-reliance on foreign insurers, particularly the International Group of P&I Clubs, for essential trade coverage.
Recent geopolitical events, including sanctions regimes, disruptions in the Red Sea, and the fragmentation of global trade, have underscored how access to maritime insurance can become a strategic vulnerability. The sustainability of any domestic maritime insurance framework will depend on active participation from shipowners, operators, insurers, brokers, and other maritime stakeholders.