Insurance Surety Bonds for NHAI Projects Cross ₹10,000 Crore Landmark
India is set to become the world’s third-largest construction market
Achieving a significant milestone in India’s infrastructure financing landscape, Insurance Surety Bonds (ISBs) issued for National Highways Authority of India (NHAI) contracts have crossed the ₹10,000 crore mark.
Till July 2025, 12 insurance companies issued nearly 1,600 ISBs as Bid Security and 207 ISBs as Performance Security, with a cumulative value of around ₹10,369 crore for NHAI projects. The Authority has been proactively encouraging the use of ISBs as an additional option to furnish Bid Security and Performance Security deposits.
To promote wider adoption of Insurance Surety Bonds (ISBs) and Electronic Bank Guarantees (eBGs), NHAI recently organized a workshop in New Delhi. The session was chaired by Shri N.R.V.V.M.K Rajendra Kumar, Member (Finance), NHAI, and attended by Shri Nilesh Sathe, Former Member, IRDA, along with senior NHAI officials, industry experts, and representatives from insurance and financial institutions.
Insurance Surety Bonds function as financial guarantees provided by insurance companies, ensuring that contractors meet their obligations under agreed project terms. Recognizing their importance, the Ministry of Finance has already placed ISBs and e-BGs at par with traditional Bank Guarantees (BGs) for all government procurements.
As India is set to become the world’s third-largest construction market, the demand for bank guarantees in the infrastructure sector is projected to rise by 6–8% annually. In this context, ISBs serve as a cost-effective, viable alternative to traditional BGs, offering substantial relief to contractors and developers in the sector.
