“The discussions on the P&I entity had progressed very well in the past, and we have taken up the issue with the Department of Financial Services two to three days ago. We have also conducted a study on this, and it should be with us very soon. This will be an important step for us in the coming time,” said Rajesh Kumar Sinha, special Secretary at the Ministry of Ports, Shipping and Waterways, in response to this paper’s queries.
Sinha was speaking at a press conference of the inter-ministerial group (IMG) on the West Asia crisis. Officials familiar with the matter said the study is nearing completion, and discussions have been revived with the finance ministry on the policy, financial, and regulatory provisions required to set up the entity.
Insurance premiums typically rise during times of crisis for both general marine insurers and P&I clubs — mutual insurance providers generally funded by shipping stakeholders themselves.
Among other concerns, exporters and freight forwarders have flagged the high cost of insurance to the government, as war-risk premiums have been added to coverage, Sinha said, adding that the government is looking into the issue. “We did not see this issue with Shipping Corporation of India vessels,” he noted.
In a note dated March 11, Moody’s Ratings said the closure of the Strait of Hormuz creates significant uncertainty for insurers. War-risk policies generally include “blocking and trapping” provisions that allow a total loss claim after a prolonged period of detention, commonly 12 months.
Plans to set up a national P&I entity are not new, but officials said progress had slowed earlier due to limited financing options. The government had previously mooted several ideas, including starting small with coverage for coastal vessels and funding an initial corpus itself.
On the current situation of vessels, Sinha said around 300,000 tonnes of LPG cargo is currently stuck on vessels west of the Strait of Hormuz.
“The second LPG carrier, Nanda Devi, reached Kandla at around 2:30 am today, and cargo is now being discharged from both LPG carriers, Shivalik and Nanda Devi. There are multiple discharges. The discharge of Nanda Devi is ship-to-ship, from mother ship to daughter ship. It is underway. All efforts have been made to streamline vessel movement and cargo operations at the port,” said Sinha.
Moreover, 161 Indian sailors have been repatriated and brought back to India in the past 24 hours after signing off in the Gulf region. This was done in coordination with Indian embassies and missions.
“There was a news report this morning that around 450 containers are lying on the road at Jawaharlal Nehru Port. Let me clarify that this report is baseless. The containers are in container freight stations, warehouses, and factory premises, as per JNPA policy,” he added.
“Historical precedents, including the Iran-Iraq war and the Russia-Ukraine conflict, show that such scenarios can result in clustered claims and disputes over aggregation, timing of loss, and policy attachment,” it said. The insured vessels in the Strait of Hormuz had an aggregate value exceeding $25 billion at the beginning of the conflict.
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