Rajesh Kumar Sinha,Special Secretary, Shipping Ministry
Speaking during an inter-ministerial briefing, Special Secretary in the Shipping Ministry Rajesh Kumar Sinha, said,“ We’ve made considerable progress on discussions about a P&I club. A few days ago we raised it again with the Department of Financial Services. A study on this is partly complete and we should have the report very soon. Based on that, we’ll move forward — this will be an important step for us in the near future,”
New Delhi: Special Secretary in the Shipping Ministry Rajesh Kumar Sinha, who had earlier indicated about the possibility of setting up a domestic Protection & Indemnity (P&I Club), on Wednesday, said that war risk insurance premiums for ships have increased amid evolving security concerns in sensitive maritime regions.
Sinha had said discussions on setting up a domestic P&I club have been revived as shipping lines raise concerns over war-risk premiums because of the West Asia crisis.
P&I club is a mutual insurance association covering third-party liabilities like oil spills, cargo damage, and crew injuries.
Currently, all third-party risks in shipping are re/insured with the London based International Group of P&I Clubs, not-for-profit association of 12 P&I Clubs providing marine liability cover for 90 per cent of the world’s ocean-going tonnage
“ We’ve made considerable progress on discussions about a P&I club. A few days ago we raised it again with the Department of Financial Services. A study on this is partly complete and we should have the report very soon. Based on that, we’ll move forward — this will be an important step for us in the near future,” he said.
Speaking during an inter-ministerial briefing, Sinha explained that such premiums, which are typically minimal, rise significantly when vessels operate in high-risk or conflict-prone areas.
“The additional war risk premium is being imposed now. Under normal circumstances, it is very low–around 0.01 per cent or 0.02 per cent,” he said.
He added that the premium increases depending on the risk exposure of a vessel’s route, particularly when entering conflict zones.
“If a ship enters a war zone, is on a voyage through such an area, or enters any high-risk region, the war risk premium increases,” he noted.
Sinha further said that insurance companies assess and determine these premiums based on prevailing security threats in the region.
“Insurance companies determine this based on their assessment of the security threat. It has certainly gone up,” he said.
Amid uncertainty over energy supplies due to the ongoing West Asia conflict, Sinha also said that no congestion has been reported at any port across India, assuring that maritime operations and cargo movement remain smooth and under close monitoring.
Additional Secretary said the Visakhapatnam Port Authority has created approximately 2,250 square metres of additional storage space to handle any potential surge in cargo.
He cited Mundra Port as an example, where, against a total container handling capacity of around four lakh TEUs, current occupancy stands at approximately 25 per cent.
“I had mentioned two points earlier. Additionally, today I would like to inform you about the Visakhapatnam Port Authority, where approximately 2,250 square meters of additional storage space has been created and made available. No congestion of any kind has been reported at any port. For example, at Mundra Port, the total container handling capacity is around 400,000 TEUs, and the current occupancy is approximately 25%,” the Additional Secretary said.