ISB issued by insurance companies for NHAI contracts have crossed the INR 10,000 crore landmark, which represents a major achievement.
NEW DELHI — Insurance Surety Bonds (ISB) issued by insurance companies for NHAI contracts have crossed the INR 10,000 crore landmark, which represents a major achievement, according to a statement issued by the Ministry of Road Transport & Highways on Thursday.
Till July 2025, twelve insurance companies have issued around 1,600 ISBs as ‘bid security’ and 207 ISBs as ‘performance security’ valued at around INR 10,369 crore for NHAI contracts.
NHAI has been encouraging the use of Insurance Surety Bonds as an additional mode of submitting bid security performance security deposit.
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Insurance Surety Bonds are instruments where insurance companies act as ‘surety’ and provide the financial guarantee that the contractor will fulfill its obligation as per the agreed terms.
The Ministry of Finance has made 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.
As part of the efforts to promote wider adoption of Insurance Surety Bonds (ISB) and Electronic Bank Guarantee (eBG), a workshop was organised by NHAI in the national capital.
The session was chaired by N.R.V.V.M.K Rajendra Kumar, Member (Finance), NHAI; Nilesh Sathe, Former Member, IRDA; senior NHAI officials, industry experts and representatives of various insurance and finance companies participated in the workshop.
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 per cent 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.
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