India has introduced two new government-backed insurance products for shipbuilders. These products are designed to protect domestic manufacturers against non-payments and adverse events in shipbuilding contracts.
Details of the Insurance Products
The products introduced by the Minister of Shipping, Sarbananda Sonowal, are part of India's shipbuilding development program, which is financed to cover credit risk of 14.43 billion rupees (152 million dollars). The first product, "Project Shipbuilding Credit Risk Insurance Policy," is designed by the state-owned export insurance company ECGC and covers shipbuilding contracts for foreign owners.
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The second product, "Business Credit Shield - Shipbuilders," has been developed by New India Assurance and targets domestic shipbuilding projects. Under these arrangements, the government subsidizes insurance costs and supports insurers when shipyards submit eligible claims.
Impact on the Shipbuilding Industry
This initiative addresses one of the major financial risks that shipbuilders face, especially in large contracts that may take several years to complete and payments are tied to specific milestones. Delayed payments or non-payments from buyers can expose factories to high working capital needs while ships are still under construction.
The two insurance products have been introduced under India's shipbuilding development plan worth 2.1 billion dollars, which is part of a broader maritime investment package approved by the government in September 2025. About 152 million dollars has been allocated as part of this program.
India is strengthening financial support for its shipbuilding industry to expand domestic manufacturing capacity and attract more international orders. This move allows shipbuilders to engage in larger and more international projects with greater confidence and incur lower financial risks.
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