India Revives Push for Domestic P&I Club as War-Risk Costs Spiral

India is fast-tracking the creation of its own Protection and Indemnity (P&I) insurance entity — a move that has been discussed for years but has now gained fresh and urgent momentum as the West Asia crisis sends marine insurance costs soaring for Indian shipowners and exporters.

Rajesh Kumar Sinha, Special Secretary at the Ministry of Ports, Shipping and Waterways, confirmed that discussions have been revived with the Department of Financial Services, and that a detailed study on the proposed entity is nearing completion. He made the remarks at a press conference of the inter-ministerial group (IMG) convened specifically to address the logistics and trade fallout from the West Asia crisis.

The proposed body — sometimes referred to as ‘India Club’ — is intended to provide third-party maritime liability coverage to Indian-flagged vessels through a domestic mechanism, reducing the country’s dependence on the major international P&I clubs headquartered in London and Europe. These clubs have, in recent weeks, dramatically increased premiums and war-risk surcharges for voyages through or near the Strait of Hormuz, placing significant cost pressure on Indian shipping operations.

War-risk surcharges for containers have reportedly ranged between $1,500 and $4,000 per unit depending on equipment type, while war-risk insurance premiums for tankers transiting the strait increased from around 0.125 per cent of vessel value per transit to between 0.2 and 0.4 per cent — translating to hundreds of thousands of additional dollars per voyage for large crude carriers.

Industry stakeholders and analysts have long argued that a domestic P&I entity would give India greater control over maritime insurance pricing, reduce outflows of foreign exchange to international insurers, and better protect Indian seafarers, shipowners, and cargo interests in times of geopolitical stress. The current crisis has made the case more compelling than ever, and officials indicate that a policy framework could follow in the near-term pending completion of the feasibility study.