India has approved a 129.8-billion-rupee (about US$1.4 billion) sovereign guarantee for a new maritime insurance pool, creating a domestic backstop for shipping risks as some international reinsurers reduce exposure in response to conflict and sanctions. The pool will operate for an initial 10 years and may be extended for a further five, Information and Broadcasting Minister Ashwini Vaishnaw said, as reported by Reuters.
According to an official statement, the initiative is aimed at keeping marine insurance capacity available on key trade routes where international markets have scaled back. “There was a need for a domestic maritime risk covering pool to maintain sovereignty and continuity of trade in face of withdrawal of coverage due to sanctions or due to geopolitical tensions,” the government said. The pool will cover a range of maritime risks, including hull and machinery, cargo, and war risk. Policies will be issued by participating insurers using a combined underwriting capacity of about 9.50 billion rupees, with the sovereign guarantee backing the arrangement.
The decision follows a period in which several major reinsurers, including state-backed GIC Re, have either withdrawn cover or raised premiums on selected maritime exposures. Conflicts involving Iran and Western sanctions on Russia have contributed to changes in war and political risk appetites, leaving primary carriers with reduced reinsurance support on some routes. The pool introduces a state-backed mechanism for retaining more marine risk within India. Market observers are likely to watch how the facility interacts with existing treaty and facultative structures for hull, cargo, and war business placed across regional and London markets.
In a related step, India has approved a time-bound support scheme for exporters exposed to disruptions in the Gulf and wider West Asia maritime corridor. The programme, called RELIEF (Resilience & Logistics Intervention for Export Facilitation), has been launched under the Export Promotion Mission, with Export Credit Guarantee Corporation of India Ltd. (ECGC) designated as the implementing agency. RELIEF has been introduced in the context of heightened security concerns around the Strait of Hormuz. Authorities have cited vessel diversions, longer sailing routes, congestion at transshipment hubs, and conflict-related surcharges on freight and insurance for cargoes bound for, or transshipping through, ports in the Gulf and West Asia.
The government said the scheme is intended to assist exporters facing “extraordinary freight escalation, heightened insurance premia, and war-related export risks arising from disruptions in the Gulf and wider West Asia maritime corridor.” The scheme applies to consignments linked to markets including the United Arab Emirates, Saudi Arabia, Kuwait, Israel, Qatar, Oman, Bahrain, Iraq, Iran, and Yemen, whether as final destinations or via transshipment routes.
Under the approved framework, ECGC – a government-owned export credit insurer under the Ministry of Commerce and Industry – will verify applications, assess and settle claims, disburse support, and monitor utilisation. Its existing portfolio covers commercial and political risks, including war-related contingencies, and provides the underlying structure for implementing RELIEF.
The scheme has three components:
The financial outlay approved for RELIEF is 4.97 billion rupees. ECGC will use a dashboard-based system to track claims and fund utilisation, while the Export Promotion Mission steering committee will review the scheme periodically and may recommend changes, extension, or withdrawal depending on geopolitical and trade developments.
The launch of RELIEF follows the establishment of an Inter-Ministerial Group (IMG) on Supply Chain Resilience on March 2, 2026. The IMG was set up to track the geopolitical situation and its impact on maritime flows through the Gulf region and has been holding daily review meetings since March 3, bringing together central ministries and departments, financial institutions, logistics providers, and exporter associations.
Authorities have outlined several operational measures informed by these discussions, including procedural relaxations for the movement of stranded cargo, closer coordination at ports, waivers of storage and dwell-time charges for affected consignments, advisories on shipping line pricing, and expanded monitoring of insurance risk conditions and inland logistics flows. Officials describe multiple agencies collecting near real-time information from the field to inform adjustments to trade and risk-mitigation measures.
Separately, the government has raised inflation-linked allowances by 2%, effective Jan. 1. Dearness allowance and dearness relief are mandated payments to employees and pensioners that are revised twice a year based on the consumer price index. India’s consumer price index rose to 3.40% year on year in March from 3.21% in February, influenced in part by higher cooking gas costs, while tax measures have moderated the pass-through of higher global oil prices to consumers.
