Sitharaman urges the creation of an Indian P&I organization for the shipping industry

 Sitharaman urges the creation of an Indian P&I organization for the shipping industry

Nirmala Sitharaman, India's finance minister, advocated for the creation of a domestic Protection and Indemnity (P&I) company on Thursday in an effort to increase the strategic adaptability of the country's maritime operations and strengthen India's resistance to international sanctions.

The liabilities of Indian ships operating in coastal and interior waterways would also be protected, according to Sitharaman, who made the announcement during the Global Maritime Indian Summit 2023.

"It will provide a foothold across the specialised segment of protection insurance indemnity business, that is currently dominated by few players internationally," stated the minister.

She emphasized that India is presently underrepresented in this particular market sector and recommended that the Ministry of Ports, Shipping, and Waterways take the suggestion carefully. "I believe that it (the P&I body) is something very important that we need to work on."

P&I insurance is purchased by shipowners to cover the potentially enormous costs of any unintended harm done to persons, property, or the environment.

These are often bought from big-name companies.

Due to international trade restrictions against Russia, India has previously had difficulty locating tankers, vessels, and insurance to carry oil and petroleum products from that country. This occurred at a time when increasing oil prices forced India to increase its purchases of Russian crude shipments.

According to Sitharaman, India must also acquire the skills and legal frameworks necessary to establish a marine industry international arbitration center.

According to Sitharaman, India's issues, which are often particular to its territory, "are less put forward" in the international arbitration tribunals. "We need to strengthen our connections with (maritime) arbitration so we can raise the bar for arbitration."

Sitharaman emphasized that establishing an Indian P&I body and an international arbitration center would help lessen the industry's unpredictability, which often puts the shipment of important commodities at risk.

Indian maritime companies could consider generating money by selling off their assets as well, she said.