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<\/div>\nIndia has approved a 129.8-billion-rupee ($1.4 billion) guarantee for a maritime insurance pool, a minister said on Saturday, as wars and sanctions prompt insurers to withdraw cover, threatening trade flows.<\/p>\n
The pool will run for 10 years and can be extended by a further five years, Information and Broadcasting Minister Ashwini Vaishnaw said.<\/p>\n
\u201cThere was a need for a domestic maritime risk covering pool to maintain sovereignty and continuity of trade in face of withdrawal of coverage due to sanctions or due to geopolitical tensions,\u201d according to a statement issued by the government.<\/p>\n
Several major reinsurers including India\u2019s only \u2060state-backed reinsurer GIC Re have either withdrawn cover or sharply raised premiums, leaving the industry with limited reinsurance support, Reuters reported earlier this month.<\/p>\n
Reinsurers provide vital support to insurers by helping them spread risk. Among issues leading the industry to scale back coverage are the Iran war and Western sanctions on Russia.<\/p>\n
The insurance pool will cover all maritime risks, including hull and machinery, cargo and war risk, the statement said.<\/p>\n
Policies will be issued by member insurers using combined underwriting capacity of about 9.50 billion rupees.<\/p>\n
Inflation-Linked Allowance Hiked<\/strong><\/p>\n The government said in a separate statement that it had also raised inflation-linked allowances by 2%, starting January 1.<\/p>\n Dearness allowance and dearness relief are government-mandated payments designed to offset inflation for employees and pensioners. The allowances are revised twice a year based on the consumer price index.<\/p>\n India\u2019s CPI rose to 3.40% year-on-year in March from 3.21% in February, government data showed earlier this month.<\/p>\n Price pressures have increased due to higher cooking gas costs, although government tax cuts have shielded consumers from the full impact of higher global oil prices.<\/p>\n ($1 = 92.5980 Indian rupees)<\/p>\n (Reporting by CK Nayak in New Delhi and Ashwin Manikandan in Mumbai; editing by Louise Heavens and Mark Potter)<\/p>\n<\/div>\n Related:<\/strong><\/p>\n<\/p><\/div>\n Topics<\/span> India<\/a> <\/p>\n<\/p><\/div>\n Was this article valuable?<\/p>\n<\/p><\/div>\n