All of India's West-Asia bound cargo will be insured, Department of Financial Services secretrary M. Nagaraju said during a press briefing on Tuesday.
Under cargo coverage, Bharat Maritime Insurance Pool will bear losses up to $100 million initially, he said, adding that losses beyond that threshold will be supported by sovereign guarantee.
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Three companies have already joined the Bharat Maritime Insurance Pool, including Vedanta's Sterlite Copper, Balrampur Chini Mills and Hoger Offshore and Marine Pvt. Ltd.
The announcement comes in the backdrop of no definitive resolution to the on-going war in the region. The conflict has impacted India's energy supplies from West Asia and cargo vessels passing through the region massively due to blockade of the Strait of Hormuz.
The strait has been largely blocked since February 28, when the United States and Israel launched an air war against Iran. Tehran shut the waterway in retaliation, with Iranian forces issuing warnings, boarding merchant vessels, and laying sea mines.
As per reports, around 40-50 India-bound ships are currently stranded west of the strait. New Delhi has already been in touch with Iran.
On Monday, External Affairs Ministry spokesperson Randhir Jaiswal said India remains in active contact with Iranian authorities. "We continue to be in touch with Iranian authorities so that the remaining ships can also cross the Strait of Hormuz and come to India, which is their destination," he said. At least 11 Indian ships have already crossed following diplomatic coordination.
A ceasefire between Iran and the US has been in place since mid-April, but the US simultaneously blockaded Iranian ports, prompting Tehran to reimpose restrictions on the strait — leaving the situation unresolved.
India is also looking to hold talks with Iran on the sidelines of the BRICS Foreign Ministers' Meeting in New Delhi this week to secure safe passage for Indian ships through the Strait of Hormuz, as per reports.
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