ADB grants $250 million loan to support India’s logistics sector

The Asian Development Bank (ADB) on Thursday approved a $250 million policy-based loan to support India’s wide-ranging reforms that will strengthen and modernize the country’s logistics infrastructure, improve efficiency, and lower the cost.

The approved loan will finance the first subprogram of the ‘Strengthening Multimodal and Integrated Logistics Ecosystem’, which supports the government’s efforts to create a comprehensive policy, planning, and institutional framework at the federal, state, and city levels. This will rationalize India’s high cost of logistics and reduce greenhouse gas emissions, said a press release.

By simplifying external trade logistics and domestic cargo movements, modernizing warehouses, improving business processes with integrated digital platforms, and stimulating private investments in the sector, the program will strengthen supply chains.

The recently approved, National Logistics Policy and Prime Minister Gati Shakti-National Master Plan in India will also provide transformative institutional and regulatory frameworks for the holistic development of the logistics ecosystem in the country.

“Efficient movement of goods from production and distribution centers to both domestic and external markets is critical to lowering costs and enhancing productivity and competitiveness. Manufacturing, services, and trade in India stand to benefit immensely from the significant reforms in the logistics undertaken by the government,”

Sabyasachi Mitra, ADB South Asia Department Director of Public Management, Financial Sector, and Trade.

To facilitate multimodal logistics, the subprogram promotes reforms that reduce cumbersome processes faced to obtain approvals for cargo clearance as well as the creation of digital systems that integrate regulations, processes, and logistics data.

The program promotes the facilitation of cargo movement through coastal shipping and inland waterways to strengthen multimodal transport. It also supports the Ministry of Commerce and Industry’s initiatives to issue standards for warehousing, which would encourage operational efficiency and private sector investment, the press release said.

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