India, ADB ink US$ 350 million policy-based loan to boost logistics

On December 20, the Indian government and the Asian Development Bank (ADB) signed a landmark US$ 350 million policy-based loan under the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program. This agreement marks a significant stride toward transforming India’s logistics sector, aiming to establish the country as a global leader in efficient, resilient, and sustainable logistics systems.

REC Loan

The Government of India and the Asian Development Bank (ADB), on December 20, signed a US$ 350 million policy-based loan under the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program. This initiative aims to expand India’s manufacturing sector and enhance supply chain resilience through comprehensive reforms in the logistics sector.

The loan agreement was signed by the Department of Economic Affairs (DEA), Ministry of Finance; Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry; and the ADB.

The SMILE program is a programmatic policy-based loan (PBL) designed to support the government in implementing extensive reforms in India’s logistics sector. It consists of two subprograms aimed at expanding the country’s manufacturing sector and strengthening the resilience of its supply chains. The program establishes and implements a comprehensive policy framework to improve logistics efficiency by bolstering institutional foundations for the development of multimodal logistics infrastructure at national, state, and city levels. 

The Ministry of Commerce & Industry stated that the program also focuses on standardizing warehousing and logistics assets, incentivizing private sector investments, improving external trade logistics, and adopting smart systems for low-emission logistics solutions. These efforts, as per the Ministry, are crucial for enhancing the competitiveness of India’s manufacturing sector. The strategic reforms, infrastructure development, and digital integration are expected to reduce costs, improve efficiency, generate significant employment opportunities, and promote gender inclusion, ultimately driving sustainable economic growth.

The partnership between the Government of India and ADB demonstrates a mutual commitment to driving growth and innovation in the logistics sector, contributing to India’s broader economic development objectives.

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