AP reported that India has joined Japan in offering government backed insurance for ships carrying Iranian crude in the wake of European sanctions that have nearly halved Iranian oil exports to key markets.

The first Indian ship to carry oil from Iran with Indian insurance is scheduled to load up in Iran. This is a breakthrough for the Indian government which has scrambled to maintain vital Iranian oil imports after European sanctions blocked third-party insurance in July.

The shipping company Mercator is insuring the ship with USD 50 million in hull and machinery insurance, which covers physical damage to the ship, from state owned New India Assurance Company and another USD 50 million in protection and indemnity insurance which covers a broad range of liabilities including environmental pollution and cargo damage, from government backed United India Insurance. But that is a far cry from the USD 1 billion in coverage Indian companies like Mercator got from European insurers.

Source - AP

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