Indian Infrastructure Sector to grow by 6-8% Y-o-Y
Till July 2025, 12 insurance companies have issued around 1,600 Insurance Surety Bonds (ISBs) as ‘Bid Security’ and 207 ISBs as ‘Performance Security’ valued at around Rs.10,369 crores for NHAI contracts, Ministry of Road Transport & Highways said on 11 Sept.
NHAI has been encouraging the use of Insurance Surety Bonds as an additional mode of submitting Bid Security and/or Performance Security Deposit https://www.conexpoconagg.com/.
Insurance Surety Bonds are instruments where insurance companies act as ‘Surety’ and provide the financial guarantee that the contractor will fulfil its obligation as per the agreed terms https://nhai.gov.in/#/.
The Ministry of Finance has made e-Bank Guarantees (e-BG) and Insurance Surety Bonds at par with BGs for all Government procurements. The Insurance Surety Bonds, when issued, would be cost effective and provide adequate security for NHAI projects https://ted.europa.eu/en/.
As India is poised to become the world’s third largest construction market, the requirement of Bank Guarantees in the Indian Infrastructure Sector is expected to grow by 6 to 8 percent Year-on-Year basis.
Surety Bonds act as a viable alternative to Bank Guarantees. ISB are cost-effective and could provide substantial relief for the Infrastructure Sector, said the Ministry. Fiinews.com
