Speaking at the Global Maritime Indian Summit 2023, Finance Minister Nirmala Sitharaman advocated the creation of a domestic Protection and Indemnity (P&I) entity to fortify India’s shipping operations against international sanctions and bolster its maritime resilience.
Highlighting the significance of such an initiative, Sitharaman emphasized that the proposed India-based P&I body would not only extend insurance coverage to Indian ships navigating coastal regions and inland waterways but also secure a strong position in the global protection and indemnity market, currently dominated by a handful of international players.
“The establishment of a domestic P&I entity is imperative in the realm of protection and indemnity business, a segment where India currently lacks representation,” Sitharaman remarked, urging the Ministry of Ports, Shipping, and Waterways to give serious consideration to the proposal. “I would think that it (P&I body) is a very important thing which we need to work on,” she added.
P&I insurance is vital for shipowners as it offers coverage for potential liabilities stemming from accidental harm to individuals, property, and the environment, a safeguard typically procured from global insurance providers.
Underlining the challenges faced by Indian shipping in the past, particularly in the context of trade sanctions affecting the transportation of crude and petroleum products from Russia, Sitharaman emphasized the urgency of strengthening India’s capabilities and legal frameworks for establishing an international arbitration center dedicated to the maritime sector.
“The existing international arbitration platforms often do not adequately address India’s unique jurisdictional issues,” Sitharaman remarked. “Improving our engagement with maritime arbitration is crucial in raising the standards of arbitration.”
The Finance Minister underscored that the creation of an India-based P&I body, along with the establishment of an international arbitration center, would serve to mitigate the uncertainties confronting the shipping sector, ensuring the secure transportation of essential commodities even in the face of disruptions. Sitharaman also encouraged Indian shipping operators to explore fundraising opportunities through the monetization of their assets, promoting financial stability within the industry.
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