India reviews shipping insurance risks as West Asia tensions raise costs

Summary

India is assessing the impact of rising war-risk insurance premiums on energy shipments through key global routes, as tensions in West Asia increase costs for maritime trade. Officials said no disruption has been reported, but contingency measures are under review.

NEW DELHI, March 19, 2026 — India is reviewing the impact of rising war-risk insurance costs on its energy imports as geopolitical tensions in West Asia push up shipping expenses, government and industry sources said.

Officials said there is currently no disruption to crude oil or liquefied natural gas (LNG) shipments, but authorities are closely monitoring developments, particularly in the Strait of Hormuz, a critical transit corridor for India’s energy supplies.

War-risk insurance premiums for vessels operating in sensitive regions have risen in recent weeks, reflecting heightened uncertainty. Industry participants said insurers are continuing to provide coverage, though at higher rates, increasing overall transportation costs for importers.

India relies on overseas shipments for a significant share of its crude oil and LNG requirements, with long-term contracts helping ensure supply stability. Importers such as Petronet LNG continue to receive cargoes as scheduled, with no force majeure declarations reported.

Officials said the government is in touch with insurers, shipping companies and energy firms to assess potential risks and evaluate contingency options if market conditions tighten further.

GIC Re, the country’s largest reinsurer, is among the institutions that could play a role in supporting domestic insurance capacity if required, although no specific scheme has been announced.

Market participants noted that while higher insurance premiums can add to import costs, physical disruptions to shipping routes remain limited unless there is a significant escalation in conflict.

Why this matters

• Rising war-risk premiums can increase the landed cost of crude oil and LNG, affecting downstream prices.
• Monitoring shipping routes like Hormuz is critical given India’s dependence on imports.
• Authorities may consider measures to support insurance availability if global markets tighten further.

FAQs

1. Has India launched a war-risk insurance fund?
No. There is no confirmed announcement of a dedicated government-backed war-risk insurance pool.

2. Are LNG or crude shipments disrupted?
No. Supplies are continuing normally, according to officials and industry sources.

3. Why are shipping costs rising?
Insurance premiums increase during geopolitical tensions, raising overall freight costs.

4. Could India intervene if risks increase further?
Officials are monitoring the situation and may consider measures if market conditions worsen.