Surety bonds issued by insurers for NHAI contracts cross Rs 10,000 crore-mark

New Delhi, Sep 11 (PTI) Insurance Surety Bonds (ISB) issued by insurance companies for state-owned NHAI contracts has crossed Rs 10,000 crore-mark, an official statement said on Thursday.

Till July 2025, the statement said, 12 insurance companies have issued around 1,600 ISBs as 'bid security' and 207 ISBs as 'performance security' valued at around Rs 10,369 crore for NHAI contracts. NHAI has been encouraging the use of insurance surety bonds as an additional mode of submitting bid security and/or performance security deposit.

Insurance Surety Bonds are instruments where insurance companies act as 'surety' and provide the financial guarantee that the contractor will fulfil its obligation as per the agreed terms.

The Ministry of Finance, Government of India, 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.

According to the statement, 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.

"Surety bonds act as a viable alternative to Bank Guarantees. ISB are cost-effective and could provide substantial relief for the infrastructure sector," it said. PTI BKS HVA