The Indian government plans to introduce a behaviour-based insurance system, offering discounts to responsible drivers and penalties for offenders, in a bid to improve road safety and accountability.
Union Road Transport Minister Nitin Gadkari said on Monday that India will soon issue a policy designed to reward safe motorists with lower insurance costs while increasing pressure on dangerous drivers and traffic violators.
Speaking at an event in Mumbai, Gadkari said the plan would mean “good drivers should pay less for insurance; reckless drivers and rule-breakers should face penalties”. He said the measure would be introduced soon and argued that it would encourage better road discipline.
The proposal fits with a broader move by the government to link driving behaviour more closely to accountability. Reuters has reported that officials are also weighing a negative points system under which traffic offences would reduce points on a driver’s licence and vehicle registration, with repeated breaches eventually leading to suspension or cancellation. Several reports have described the plan as a demerit-style framework, though the precise scoring rules and thresholds have not yet been announced.
The policy comes against a grim road safety backdrop. India recorded 468,000 accidents and 177,000 crash deaths in 2024, according to figures cited by the minister. Industry reports have also suggested the government is considering more digital, usage-based insurance models that would draw on real-time driving data, although that version of the plan has not been officially detailed. For now, the clearest signal from the government is that safer driving may soon carry a financial reward, while repeated violations could bring a sharper penalty.
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