India Launches P&I Club to Boost Domestic Shipping

In a major push towards maritime self-reliance, the Ministry of Ports, Shipping and Waterways is preparing to launch India Club, the country’s first indigenous Protection & Indemnity (P&I) insurance entity, by early 2026.

This strategic initiative aims to reduce India’s dependence on foreign insurers, retain capital within the country, and empower local shipping and logistics sectors, especially MSMEs. The feasibility study is currently underway and signals a pivotal shift in India’s maritime policy.

What Is a P&I Club and Why India Needs Its Own

Protection & Indemnity (P&I) Clubs provide third-party liability insurance to shipowners, covering risks such as oil spills, cargo damage, environmental liabilities, and crew injury.
Currently, Indian ships rely heavily on foreign P&I clubs—mainly European ones under the International Group (IG)—which exposes them to global sanctions, currency risks, and policy uncertainties.

With over 1,500 Indian-flagged vessels and ₹3,000–₹5,000 crore paid annually in foreign P&I premiums, India’s lack of a domestic club has long been a gap in its maritime resilience.

According to Shipping Secretary T.K. Ramachandran, India Club would act as a strategic shield, enhancing maritime sovereignty and giving Indian shipowners more affordable and controlled insurance solutions.

How India Club Will Operate

India Club is expected to follow a mutual insurance model, where shipowners become members and pool their premiums (called “calls”) into a shared fund used to pay out claims.

Key features include:

• Initial premium pool: ₹1,000 crore

• Coverage focus: Domestic/coastal routes (initially)

• Stakeholders: Public insurers like New India Assurance, GIC Re, and possible private reinsurers

• Regulation: Oversight by IRDAI

The model mirrors global practices and is being developed with technical and governance inputs from a government-appointed consultancy, with final Cabinet approval expected in FY25.

Impact on MSMEs and Indian Coastal Trade

India Club could offer premiums up to 30% cheaper than foreign options for smaller vessels and coastal operators. This is a game-changer for MSMEs, especially those involved in:

• Riverine transport

• Fisheries

• Inland waterways

• Logistics hubs under Sagarmala and Gati Shakti

States like Gujarat, Odisha, Assam, and Tamil Nadu stand to benefit as insurance friction reduces, making coastal shipping more viable and integrated with national supply chains.

Strategic Importance and Global Context

India’s move follows in the footsteps of China and Russia, which established their own P&I clubs to protect trade interests amid geopolitical instability and sanctions.

For India, a domestic P&I system can serve as a strategic buffer, especially as trade with nations like Russia increases and global tensions affect port access and insurance.

Challenges to Overcome

While promising, India Club will face hurdles:

• Global acceptance could take years

• Limited initial tonnage, as many Indian ships are flagged abroad

• Heavy claims (like oil spills) may still require global reinsurance support until domestic reserves grow

The creation of India Club aligns with broader national objectives under Make in India, PM Gati Shakti, and Sagarmala. By localising P&I coverage, India takes a vital step toward maritime sovereignty, better protection for its seafarers and businesses, and a more resilient logistics framework. For Indian shipping, especially MSMEs, this initiative could be the long-awaited safety net for navigating future challenges with confidence and control.