Tide has turned for India’s marine sector as ports expand and shipbuilding orders flow in

From the expansion of port infrastructure to increasing activity in shipyards, India’s marine sector is undergoing significant developments, and insurance providers are adapting accordingly.

Key points:
Capacity grows but reinsurers needed
Ports modernise under PPP model
Shipbuilding orders shift to India

“When we talk about ports, it’s a complex system in operation: highly organised, with docking ships and stacking containers. It resembles Lego blocks from afar, but it supports trade and economic movement,” said Ipsita Basu, head of marine at Markel India, in an interview with IUMI Today.

India’s marine insurance market is experiencing changes alongside accelerated infrastructure growth, evolving shipbuilding initiatives, and new maritime legislation. More than 30 general insurers operate domestically, yet only a few underwrite marine hull insurance. Although domestic capacity is slowly increasing, reinsurance capacity is still required.

“The capacity is concentrated among the top five or six companies,” Basu highlighted, cautioning that combining hull, cargo, and port exposures could increase accumulation risks. “If a vessel were to hit a berth and sink, this would represent port, hull, and cargo losses within one account.”

Expansion dynamics

Growth in India’s ports and shipbuilding industries is altering both risk and opportunity profiles. Basu noted that “95 percent of international cargo to and from India is carried on foreign-owned vessels”, indicating the need for domestic fleet expansion. While China, South Korea, and Japan handle 93 percent of global shipbuilding, India holds a 2 percent share. With major Asian shipyards booked until 2028, some orders are shifting toward India.

“With Southeast Asian shipyards at full capacity, India has an opportunity to expand its shipbuilding industry to meet global demands,” she added.

Structural challenges persist, including high capital requirements, long project timelines, limited automation, difficulties sourcing ship-grade steel, and reliance on imported equipment and designs.

“With lower automation levels and despite lower labour costs, India faces about a 20 percent price disadvantage compared to South Korea,” Basu observed. Port operations are also changing, with a shift from state-run service ports to public-private partnerships, where private operators manage terminals under concession agreements. “Infrastructure is expanding, new cranes are being installed, and turnaround times are improving,” she said.

Insurance perspectives in a changing environment

Underwriters are adjusting their approaches to reflect new risks. “We pay close attention to cargo storage and crane operation and maintenance,” Basu explained. Claims can arise from machinery issues or operator errors, such as confusing Fahrenheit with Celsius units in refrigerated cargo shipments

In these circumstances, local knowledge combined with international claims expertise is important. “Our team meetings include discussions of claims from different markets worldwide, which supports implementing effective solutions in India,” she said.

“Clients can receive immediate coverage approval.”

Global trends also affect the Indian market, particularly fluctuations in shipping cycles and tariffs. “Supply and demand remain key factors for the shipping sector,” Basu stated. Tariff changes can prompt shipment surges, resulting in congestion, customs delays, and documentation mistakes. “Generally, these factors contribute to shipment delays, uncertainty, and pressure on spot rates.”

Geopolitical issues create further challenges. The Red Sea and Persian Gulf are essential for India’s energy imports; interruptions in these areas influence premiums and shipping patterns. “Some clients rerouted vessels via the Cape of Good Hope, but later resumed using the Red Sea route due to increased freight costs,” Basu noted.

A local presence is an essential advantage for timely support to Markel’s insureds. “If a vessel is set to enter a high-risk area, clients can receive immediate coverage approval rather than waiting for London office hours. This approach has enhanced Markel’s brand confidence in India,” she explained.

Looking forward, Basu commented on recent legislative measures. “In 2025, five major parliamentary acts related to maritime trade were passed, including updates to merchant shipping, carriage of goods by sea, ports, and coastal vessel laws.” These reforms aim to strengthen the Indian fleet, encourage investment, and align with international standards.

“The focus is on developing this industry,” Basu concluded. “Collaboration is essential, combining local expertise with international knowledge to help India participate actively in the global maritime sector.”

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