Indian Government and ADB Finalize $350 Million Loan to Enhance Supply Chains
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New Delhi, Dec 20 (NationPress) The Indian government and the Asian Development Bank (ADB) have officially entered into an agreement for a $350 million policy-based loan as part of the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) initiative. This funding aims to fortify the domestic manufacturing industry and enhance the resilience of supply chains.
As stated by the Ministry of Commerce and Industry, the SMILE initiative represents a programmatic policy-based loan (PBL), designed to assist the government in implementing extensive reforms within India's logistics sector.
The strategy encompasses two subprograms focused on expanding India's manufacturing capabilities and boosting the resilience of its supply chains.
According to a statement from the ministry, “The collaboration between the Indian government and ADB highlights a mutual dedication to promoting growth and innovation in the logistics sector, thereby supporting India’s broader economic development objectives.”
The loan agreement was signed by the Department of Economic Affairs (DEA) of the Ministry of Finance, the Department for Promotion of Industry and Internal Trade (DPIIT) of the Ministry of Commerce and Industry, along with representatives from the ADB.
The SMILE initiative implements a comprehensive policy framework aimed at improving logistics efficiency by strengthening the institutional foundations necessary for the development of multimodal logistics infrastructure at national, state, and city levels.
Additionally, it facilitates the standardization of warehousing and other logistics assets to reinforce supply chains and encourage greater private sector participation, thus enhancing efficiencies in external trade logistics while adopting intelligent systems for sustainable and low-emission logistics.
The ministry emphasized that advancing India’s logistics sector is crucial for boosting the competitiveness of its manufacturing industry. Through strategic policy reforms, infrastructure enhancement, and digital integration, the ongoing reforms are set to transform the logistics landscape, which is anticipated to reduce costs, increase efficiency, create significant employment opportunities, and promote gender inclusion—ultimately driving sustainable economic growth.
On Thursday, the government along with the ADB also signed a $42 million loan aimed at providing coastal and riverbank protection to enhance the resilience of local communities and natural ecosystems in Maharashtra. The ADB funding will assist in restoring and stabilizing Maharashtra's coastline while safeguarding the livelihoods of coastal populations.
