ADB approves $350 Million loan to modernise India’s Logistics Sector
NEW DELHI : The Asian Development Bank (ADB) has approved a $350 million policy-based loan to assist India in strengthening and modernising its logistics sector.
According to a statement issued by the bank on Friday (6 December), the loan will finance the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem Program, which supports India’s efforts to create a comprehensive policy, planning, and institutional framework at the central, state, and city levels.
The development of India’s logistics sector is pivotal in enhancing the competitiveness of its manufacturing sector.
Through strategic policy reforms, infrastructural improvements, and digital integration, the government’s ongoing reforms are set to transform the logistics landscape, ADB said.
This transformation is expected to not only reduce costs and improve efficiency, but also create employment opportunities and promote gender inclusion–driving sustainable economic growth.
The Government of India has launched several strategic policies to address logistics sector constraints, including the Prime Minister Gati Shakti-National Master Plan (PMGS-NMP) and the National Logistics Policy (NLP).
These initiatives aim to improve infrastructure, streamline processes, and promote digitisation.
ADB’s programme supported India’s reform efforts, which have improved India’s ranking in the World Bank’s Logistics Performance Index and reduced logistics costs significantly, the bank said.
Key actions include the establishment of institutional arrangements for logistics planning at the state and city levels, implementation of a grain storage plan, and adoption of green transition guidelines for inland waterways.
“The development of the logistics sector has a profound impact on the manufacturing sector’s competitiveness. Improved logistics efficiency enhances supply chain resilience, reduces transaction costs, and boosts export competitiveness,” said ADB Senior Public Management Economist Mr. Sameer Khatiwada.
“The integration of digital technologies and standardized processes facilitates smoother movement of goods, which is crucial for manufacturing growth,” Khatiwada added.
From 2000 to 2022, India’s goods export increased from $48.5 billion to $467.5 billion while industrial exports grew from $39.6 billion to $317.4 billion.
The government aims to reach $2 trillion in exports of goods and services by 2030. The programme is helping India achieve this target by enhancing productivity and transfer of goods and reducing logistics cost while contributing to the reduction of greenhouse gas emissions.
The logistics sector reforms are also expected to create substantial employment opportunities, both in urban and rural areas.
The increased demand for skilled logistics workers, driven by private sector investments and process efficiency, will contribute to job creation.
Additionally, the digitisation and automation of logistics processes will generate new types of employment, aligning with the evolving needs of the sector, ADB said.