India Secures $350M ADB Loan to Boost Manufacturing

The central government and the Asian Development Bank (ADB) finalized a USD 350 million policy-based loan as part of the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) initiative. The official statement from the Ministry of Commerce & Industry indicated that this loan, which is based on policy, seeks to enhance India's manufacturing industry and strengthen the durability of its supply chains.

The parties that signed the loan agreement included the Department of Economic Affairs (DEA), Ministry of Finance; the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry; along with the ADB.

The SMILE initiative is a policy-driven loan (PBL) designed to assist the government in implementing extensive reforms in India's logistics sector. The programmatic strategy includes two subprograms designed to enhance India's manufacturing industry and strengthen the resilience of its supply chains.

The program creates and implements a thorough policy framework to improve logistics efficiency by reinforcing the institutional foundations for multimodal logistics infrastructure development at the national, state, and municipal levels.

The ministry highlighted that it will aid in standardizing storage and various logistics assets to enhance supply chains and encourage increased private sector investment, boosting efficiencies in external trade logistics and implementing smart systems for effective and low-emission logistics. The advancement of India's logistics industry is essential for improving the competitiveness of its manufacturing sector.