India’s First Marine Insurance Group: A Strategic Shift for SMEs and Maritime Autonomy
India is gearing up to establish its first domestic marine insurance group a move that marks a turning point in its maritime and economic policy. Proposed as the India Club, this specialized Protection and Indemnity (P&I) entity aims to provide liability coverage for vessels navigating coastal and inland waters. More importantly, it’s a strategic hedge against mounting global disruptions in maritime trade and insurance.
This initiative signals more than just a financial safeguard. It is a foundational move toward strengthening India’s shipping and logistics ecosystem, many parts of which are powered by small and mid-sized enterprises that remain vulnerable to external shocks and foreign underwriting decisions.
Why This Move Matters
Today, Indian shipping operations largely rely on the International Group of P&I Clubs, headquartered in London. These clubs cover over 90% of global shipping liability risks. However, with geopolitical shifts and Western sanctions tightening around certain trade corridors including India’s ongoing oil imports from Russia this dependency creates a structural vulnerability.
By launching a homegrown P&I group, India is aiming to insulate its maritime sector from such external pressures, while offering consistent coverage tailored to its domestic operational realities. The proposed India Club will initially serve vessels in the coastal and inland sectors segments where many operators are either small businesses or vendors serving larger fleets.
This is a critical infrastructure upgrade, and its timing is deliberate. India’s coastal shipping network is expanding rapidly under initiatives like Sagarmala and PM Gati Shakti, both of which emphasize integrated logistics, multimodal transport and efficient port connectivity. A robust domestic marine insurance ecosystem is a natural enabler of these ambitions.
Global Perspective: Learning from Japan
India is not alone in this thinking. Countries like Japan have long operated their own national P&I clubs, such as the Japan P&I Club, which insures a wide spectrum of domestic and international shipping. These entities provide not only risk coverage but also act as strategic instruments supporting national shipping industries during crises, enhancing port security compliance and encouraging local shipbuilding through preferential policies.
India’s move reflects a similar vision: one where economic security and maritime resilience are tightly interlinked and where the country isn’t overly reliant on global institutions that may not prioritize Indian trade flows.
How will it work?
Initial discussions suggest that the India Club will be structured as a mutual or member-led insurance entity, backed by a pool of Indian stakeholders. Founding contributions could come from public sector insurers and possibly large state-run shipping companies.
Over time, the risk pool will be supported through premiums collected from member vessel operators. In principle, this model allows flexibility and responsiveness two critical features for covering vessels in high-risk or politically sensitive trade zones. As the corpus builds, India could also look to domestic reinsurers to stabilize risk and potentially even export coverage in the long run.
Regulatory path and legal groundwork
Setting up a P&I club in India may require specific legal provisions, especially if the structure involves mutual insurance or alternative underwriting models. Regulatory coordination between the Insurance Regulatory and Development Authority of India (IRDAI), the Ministry of Shipping and public insurers will be essential to ensure credibility, solvency safeguards and international acceptability of the coverage.
Care must be taken to align this initiative with India’s existing marine insurance rules and to create dispute resolution mechanisms that reflect both Indian law and global maritime standards.
Strategic Alignment with Economic Goals
The timing of this initiative fits neatly into India’s larger economic playbook. With coastal shipping gaining prominence, inland waterways expanding and export logistics becoming a national priority, a domestic insurance layer adds both confidence and control. As Sagarmala identifies dozens of projects in coastal and river-based logistics and Gati Shakti maps them to last-mile infrastructure, businesses especially SMEs in transport, marine services and port-linked industries will benefit from an ecosystem that feels more secure and predictable.
Additionally, local insurance coverage encourages more formalization, standardized risk management and investment-readiness among small fleet operators and auxiliary service providers. For businesses in marine equipment, ship repair, digital logistics or even cold chain exports, this could be the missing link that allows them to operate at scale.
Looking Ahead
While the India Club won’t replace global P&I coverage overnight, it can establish a parallel structure that supports India-centric trade, MSME participation and strategic maritime self-sufficiency. Its success will depend on how well it balances operational efficiency with regulatory soundness and how quickly it can build both capital and user trust.
If done right, this isn’t just a response to external sanctions it’s a long-term move toward building a resilient maritime economy where small and medium enterprises aren’t just service providers, but key contributors to national capability.
