Insurance Surety Bonds (ISBs) issued for National Highways Authority of India (NHAI) projects have crossed the Rs 10,000 crore milestone, signalling growing adoption of this financial instrument in the infrastructure sector. As of July 2025, 12 insurance companies have issued around 1,600 ISBs as ‘Bid Security’ and 207 ISBs as ‘Performance Security’ — together valued at approximately Rs 10,369 crore. NHAI has been actively encouraging ISBs as an alternative to traditional bid and performance security deposits.

To further drive the uptake of Insurance Surety Bonds (ISBs) and Electronic Bank Guarantees (eBGs), NHAI organised a workshop in New Delhi. The session was chaired by N.R.V.V.M.K Rajendra Kumar, Member (Finance), NHAI, and attended by former IRDA member Nilesh Sathe, senior NHAI officials, industry experts and representatives from insurance and financial companies.

ISBs allow insurance companies to act as sureties, providing a financial guarantee that contractors will meet their contractual obligations. Recognising their potential, the Ministry of Finance has already accorded parity between e-BGs, Insurance Surety Bonds and traditional bank guarantees for all government procurement processes.

With India set to become the world’s third-largest construction market, demand for bank guarantees in infrastructure is projected to rise 6–8% annually. ISBs are emerging as a cost-effective and reliable alternative to bank guarantees, offering significant support to contractors and easing financial pressures in the infrastructure sector.