India is developing its own protection and indemnity mutual for domestic shipowners that could eventually ease the pressure of Western sanctions on its Russian oil imports.
Tentatively named the India Club, the project will initially target Indian-flagged inland and coastal shipping, which relies on the international fixed premium market for its P&I cover. The idea is to create an Indian P&I club.
However, there are also plans to expand the project to global shipping markets, which could help the country overcome sanctions that currently hinder its ability to obtain insurance for Russian oil imports.
The club would most likely have to access the international reinsurance markets to acquire the levels of cover required for international shipping.
A senior official from the Ministry of Ports, Shipping & Waterways told The Hindu newspaper: “We are looking at having a P&I entity to which Indian shipowners can have access.
“But we need to work on factors like having a seed fund or some corpus, which the ministry may have to provide in the initial days. However, work is on over the next few months, and there will be some structure to these discussions.”
Last October, finance minister Nirmala Sitharaman told a maritime conference such a move would “reduce India’s vulnerability to international sanctions and pressures to provide greater flexibility in shipping operations”.
India is the second-largest importer of Russian crude after China.
However, under Western sanctions, the 12 members of the International Group of P&I Clubs — which provides cover for more than 90% of the oceangoing fleet — are not allowed to provide P&I cover for tankers carrying Russian oil over a stated price cap.
Meanwhile, the Indian Register of Shipping, an international classification society, said its fleet grew by 5m gt last year, with new owners from the Middle East, Asia-Pacific and Europe.
