Govt Working on Resuming Shipping Corp of India's Maritime Services to West Asia

Why It Matters

Resuming SCI services would restore a critical supply route for oil, gas and LPG, reducing reliance on third‑party carriers and stabilizing Indian exporters amid geopolitical volatility.

Key Takeaways

• India seeks to restart SCI routes to West Asia despite Hormuz disruptions.
• SCI fleet includes 61 vessels, covering crude, LNG, and petroleum products.
• Government approved a $1.6 billion maritime insurance pool with sovereign guarantee.
• West Asia supplies ~60% of India's oil and gas imports.
• Over 2,800 Indian seafarers repatriated; 19,500 still in the Gulf region.

Pulse Analysis

The Strait of Hormuz, through which roughly 20% of global oil passes, has been severely disrupted by the ongoing conflict between Iran and its regional adversaries. This blockage has forced many carriers to reroute or suspend services, raising freight rates and creating uncertainty for nations dependent on Middle‑East energy supplies. India, which imports about 60% of its crude oil, natural gas and 90% of LPG from the region, has felt the pinch as its exporters grapple with higher logistics costs and delayed shipments.

To mitigate the risk, the Ministry of Ports, Shipping and Waterways is moving to reactivate Shipping Corporation of India’s (SCI) West‑Asia routes. SCI’s 61‑ship fleet, comprising crude oil, LNG and petroleum product tankers, can provide a sovereign‑backed alternative to private operators. Complementing this effort, the Union cabinet approved the Bharat Maritime Insurance Pool, a $1.6 billion fund with a sovereign guarantee, designed to keep insurance premiums affordable even when geopolitical volatility spikes claims.

If SCI services resume, Indian exporters will regain a reliable conduit for both inbound energy and outbound manufactured goods, reducing dependence on third‑party logistics and cushioning the current 7% dip in March merchandise exports, which fell to $38.9 billion. The insurance pool also signals a broader policy shift toward safeguarding critical maritime corridors, a move that could encourage other emerging economies to adopt similar risk‑sharing mechanisms as global trade faces heightened geopolitical headwinds.