Amid escalating tensions in West Asia and ongoing disruptions in the Strait of Hormuz, the Government of India has revived plans to establish a domestic Protection and Indemnity (P&I) club aimed at strengthening the country’s maritime insurance ecosystem and reducing reliance on foreign insurers.
The move comes as several vessels remain stranded and global shipping companies grapple with steep war risk surcharges imposed by insurers due to heightened geopolitical risks in the region.
Rajesh Kumar Sinha, Special Secretary in the Ministry of Ports, Shipping and Waterways, on Tuesday confirmed that discussions are actively underway with the Department of Financial Services. “We recently revisited the proposal with DFS, and a detailed study has already been commissioned. The report is expected shortly, and further action will be based on its recommendations. This will be an important step for us,” he said.
The idea of a domestic P&I club had been explored earlier but was put on hold as tensions in West Asia eased. However, the current volatility has renewed urgency around building sovereign capacity in marine liability insurance.
P&I clubs are mutual insurance associations that provide coverage to shipowners against third-party liabilities, including oil spills, cargo damage, pollution incidents, collisions, and crew injuries. At present, more than 90% of global ocean-going vessels are insured through the International Group of P&I Clubs, a 13-member consortium that covers nearly 60,000 ships worldwide.
The government has been increasingly vocal about the need for self-reliance in this critical sector. In 2023, Finance Minister Nirmala Sitharaman had highlighted the importance of creating a domestic P&I framework to reduce dependence on overseas insurers and mitigate risks arising from sanctions or geopolitical disruptions.
Industry experts believe that establishing an Indian P&I club could enhance resilience for domestic shipping firms, provide greater control over insurance costs, and ensure continuity of operations during global crises.
