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World
India has set up a $1.5 billion marine insurance pool to protect its vessels from war risks in the Middle East.
A $1.5 billion marine insurance guarantee fund was launched by India on Tuesday to shield its ships from disruptions tied to the Middle East conflict. The Ministry of Finance announced the creation of the "Bharat Marine Insurance Consortium," a pool designed to facilitate marine insurance coverage against war and sanctions risks.
The consortium will cover war risks for vessels flying the Indian flag or operated by Indian interests, both inbound and outbound from India, amid ongoing tensions in the region, the ministry added in its statement.
The move comes as the Strait of Hormuz remains effectively or nearly completely closed since late February 2026, following U.S.-Israeli strikes on Iran. This has driven war-risk insurance premiums sharply higher—from 0.25% to levels reaching 2-6% or more in some cases—and prompted several international insurers to withdraw their coverage.
India relies heavily on maritime imports for over 85% of its oil needs, along with vast quantities of liquefied natural gas and essential goods. A significant portion of this trade transits the Strait of Hormuz, which handles roughly one-fifth of global oil trade.
Rising insurance costs and difficulty securing coverage had threatened to increase fuel and commodity prices within India and disrupt supply chains.
