Insurance Surety Bonds for NHAI Cross ₹10,000 Crore Milestone

Insurance Surety Bonds (ISBs) issued by insurance companies for National Highways Authority of India (NHAI) contracts have crossed the ₹10,000 crore mark. 

Till July 2025, around 1,600 ISBs as Bid Security and 207 ISBs as Performance Security, valued at approximately ₹10,369 crore, were issued by 12 insurance companies. This milestone highlights the growing adoption of ISBs in the infrastructure sector.

Workshop to Promote ISBs and e-BGs

To further encourage adoption, NHAI organised a workshop in New Delhi chaired by Shri N.R.V.V.M.K Rajendra Kumar, Member (Finance), NHAI. 

The event saw participation from senior officials, industry experts, former IRDA Member Shri Nilesh Sathe, and representatives of insurance and finance companies. Discussions emphasised the role of ISBs and electronic Bank Guarantees (eBGs) as effective alternatives to traditional guarantees.

Benefits of Insurance Surety Bonds

ISBs allow insurance companies to act as surety, providing a financial guarantee that contractors meet obligations. Recognised by the Ministry of Finance at par with traditional bank guarantees, ISBs are cost-effective, secure, and efficient, reducing dependency on bank guarantees for infrastructure projects.

Growing Relevance in Infrastructure Sector

As India is set to become the world’s third-largest construction market, the demand for bank guarantees is expected to rise 6–8% annually. ISBs provide a viable, affordable, and scalable solution to meet this increasing requirement, ensuring liquidity and relief for developers.

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Conclusion

Crossing the ₹10,000 crore mark underlines the success of Insurance Surety Bonds in infrastructure financing. With strong policy support and industry acceptance, ISBs are poised to play a crucial role in strengthening India’s rapidly expanding infrastructure sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

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