NHAI Contracts Boosted by Rs 10,000 Crore Insurance Surety Bonds
Insurance Surety Bonds for NHAI contracts have surpassed Rs 10,000 crore, with 1,600 issued as bid security and 207 as performance security, valued at Rs 10,369 crore till July 2025. Recognized by the Ministry of Finance, these bonds offer a cost-effective alternative to Bank Guarantees in India's growing infrastructure sector.
- Country:
- India
The National Highways Authority of India (NHAI) has seen Insurance Surety Bonds (ISB) for its contracts surpass the Rs 10,000 crore mark, according to an official statement Thursday. As of July 2025, 12 insurance companies have issued around 1,600 ISBs as 'bid security' and 207 ISBs as 'performance security', valued at about Rs 10,369 crore.
The Ministry of Finance in India has equated e-BGs and Insurance Surety Bonds with traditional Bank Guarantees for government procurements. This decision facilitates cost-effective measures, offering adequate security for NHAI projects.
Recognized as a viable alternative to Bank Guarantees, Insurance Surety Bonds are expected to ease financial constraints in the infrastructure sector, particularly as India is projected to become the world's third-largest construction market, with bank guarantee needs growing annually by 6 to 8%.
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