New Maritime Insurance Scheme Launched by Indian Government

Overview of the New Maritime Insurance Initiative

During a recent media briefing, Union Cabinet Minister Ashwini Vaishnaw announced a new initiative aimed at ensuring that Indian trade maintains access to affordable insurance for vessels transporting cargo to and from Indian ports, even through unstable maritime routes. The minister detailed that this scheme will encompass various maritime risks, including hull and machinery, cargo, protection and indemnity (P&I), and war risks. The coverage will extend to Indian-flagged vessels, those controlled by India, and vessels with India as either the origin or destination.

According to Minister Vaishnaw, a sovereign guarantee fund of approximately Rs 12,980 crore will be established to support maritime insurance. This fund will cover a wide range of maritime risks over a ten-year period, with the possibility of a five-year extension. The insurance duration is set for ten years, extendable up to 15 years. The Cabinet emphasized that this initiative will ensure continuous insurance coverage while reducing reliance on foreign insurers, ultimately saving foreign exchange on insurance premiums.

Given the rising global volatility and geopolitical tensions, maritime trade has faced increased risks, leading to higher insurance costs and uncertainty regarding the availability of coverage. The insurance policies will be issued by members of the Pool, utilizing a combined underwriting capacity of around Rs 950 crore. This Pool aims to manage liability insurance locally, tailored to the specific conditions and regulatory requirements of Indian shipping, while also fostering specialized marine underwriting, claims management, and legal expertise within the country.

2% DA Increase for Central Government Employees

In addition, the Union Cabinet has approved a 2% increase in dearness allowance (DA) for central government employees and pensioners, raising the allowance from 58% to 60%. This adjustment addresses the long-awaited revision in compensation for the workforce, as stated by Minister Vaishnaw. He noted that the total financial impact on the exchequer due to the increase in both Dearness Allowance and Dearness Relief would amount to Rs 6,791.24 crore annually, benefiting approximately 50.46 lakh central government employees and 68.27 lakh pensioners.