India’s Initiative to Establish a Local P&I Unit for Indian-Flagged Vessels

India is seeking support from global ship owners to establish a local protection and indemnity unit (P&I) due to the small size of Indian-flagged ships. The establishment of a P&I unit would reduce India’s vulnerability to international sanctions and pressure and provide greater strategic flexibility in shipping operations. Global ship owners must have confidence in dealing with the insurance center in India in order for the initiative to succeed. The P&I unit would also protect the liability of vessels operating in coastal waters and inland waterways. India has struggled to secure tankers and insurance for transporting crude oil from Russia after European Union member states banned insurers from insuring tankers carrying Russian oil following the Kremlin’s invasion of Ukraine.

Industry experts agree that establishing an Indian P&I unit will not happen overnight and that its success is uncertain without the support of the international market. However, there is a requirement for Indian tonnage to be covered by the unit, similar to the requirement for Indian ships to be registered with the Indian Register of Shipping. It is suggested that the Indian P&I Club can offer India-specific services for a small fee and be funded by a major insurance company. Although India has previously attempted to establish P&I cover, these efforts have not yielded significant results.

Overall, securing support from global ship owners is crucial for India to establish a local P&I unit, which would provide protection and indemnity coverage for Indian-flagged vessels. This initiative would reduce India’s vulnerability to international sanctions and offer greater strategic flexibility in shipping operations. However, the success of the unit depends on winning the confidence of the international market and ensuring that Indian tonnage is covered.

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