The Union Ministry of Road Transport and Highways is set to launch India’s first-ever surety bonds insurance product for highway contractors on December 19 this year. This comes two years after the union ministry directed the Insurance Regulatory and Developmental Authority of India (IRDAI) to explore the feasibility of surety bonds.

• The general insurance companies will issue the first-ever surety bonds insurance products for highway contractors.
• The new mechanism will help boost liquidity in the infrastructure sector by freeing up the working capital of the constructors that are stuck as bank guarantees.
• These funds can be used by contractors to expand their business and further boost the infrastructure of the country.
• This will help address the challenges associated with highway construction.