The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the creation of a Sovereign Maritime Fund with a corpus of ₹13,800 crore to provide insurance support for Indian-flagged vessels. The decision, cleared on April 18, 2026, is aimed at strengthening the resilience of India’s shipping sector amid rising geopolitical uncertainties.
The proposed fund will be used to offer cost-effective insurance coverage to Indian vessels operating in sensitive and high-risk maritime zones. Officials indicated that the initiative seeks to reduce dependence on expensive international insurance markets, particularly during periods of heightened global tension that tend to drive up premiums for shipping operators.
The move comes against the backdrop of growing concerns over maritime safety due to the ongoing tensions linked to the US-Iran conflict. These tensions have raised risks for commercial shipping, especially in critical oil transit routes, prompting governments and industry stakeholders to reassess risk mitigation strategies.
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A key area of concern has been the Strait of Hormuz, one of the world’s most strategically important shipping corridors. A significant portion of global oil supply passes through this narrow waterway, making it highly vulnerable to disruptions during geopolitical conflicts. Indian shipping companies operating in this region have faced increased insurance costs and operational challenges in recent months.
The Sovereign Maritime Fund is expected to enhance India’s maritime security framework by ensuring that vessels flying the Indian flag have access to reliable and affordable insurance coverage. This could also encourage more ships to register under the Indian flag, supporting the government’s broader objective of expanding the domestic shipping industry.
While further operational details of the fund are yet to be officially announced, the decision signals a proactive approach by the government to safeguard trade routes and protect national economic interests. Industry experts view the move as a timely intervention that could provide stability to Indian shipping operations in an increasingly volatile global environment.
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