Centre, ADB sign $350 million loan to boost India's supply chains

New Delhi, Dec 20 (IANS) The Indian government and the Asian Development Bank (ADB) on Friday signed an agreement for a $350 million policy-based loan under the second subprogramme of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) programme, to strengthen the domestic manufacturing sector and improve the resilience of supply chains.

According to the Ministry of Commerce and Industry, the SMILE programme is a programmatic policy-based loan (PBL) to support the government in undertaking wide-ranging reforms in the logistics sector in India.

The approach comprises two subprograms, which aim to expand India’s manufacturing sector and improve the resilience of its supply chains.

"The collaboration between the government of India and ADB reflects a shared commitment to fostering growth and innovation in the logistics sector, supporting India’s broader economic development goals," said the ministry in a statement.

The signatories to the loan agreement were 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, and the ADB.

The SMILE programme operationalises a comprehensive policy framework to enhance logistics efficiency through strengthening the institutional bases for multimodal logistics infrastructure development at the national, state, and city levels.

It also helps in standardising warehousing and other logistics assets to strengthen supply chains and incentivise the greater private sector, improving efficiencies in external trade logistics and adopting smart systems for efficient and low-emission logistics.

According to the ministry, the development of India’s logistics sector is vital to enhancing the competitiveness of its manufacturing sector. Through strategic policy reforms, infrastructure development, and digital integration, ongoing reforms are poised to transform the logistics landscape. This transformation is expected to reduce costs, improve efficiency, generate substantial employment opportunities, and promote gender inclusion—driving sustainable economic growth.

On Thursday, the government and the ADB signed a $42 million loan to provide coastal and riverbank protection to increase the resilience of local communities and natural ecosystems in Maharashtra. The ADB financing will help restore and stabilise Maharashtra's coastline and protect the livelihoods of coastal communities.

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