The Government of India has signed a $350 million loan agreement with the Asian Development Bank (ADB) to support the development of the nation’s logistics and manufacturing sectors. Under the second phase of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program, this initiative aims to enhance supply chain resilience, improve logistics efficiency, and attract private sector investments.

Policy-Based Support for Strategic Growth

The loan is structured as a policy-based programmatic approach, with SMILE being implemented in two subprograms. These reforms are focused on the following:

1. Expanding India’s manufacturing capabilities.
2. Strengthening institutional frameworks for multimodal logistics infrastructure at national, state, and city levels.
3. Standardising warehousing and logistics assets to boost trade and investment.

The Ministry of Commerce and Industry stated that the program would operationalise a comprehensive policy framework to enhance efficiency and sustainability in the logistics sector.

Driving Economic Transformation

This collaboration between ADB and the Government of India aims to address long-standing challenges in the logistics sector. Key reforms include:

• Infrastructure Development: Modernizing multimodal logistics infrastructure to meet global standards.
• Digital Integration: Adopting smart systems to enhance operational efficiency and reduce emissions.
• Trade Facilitation: Improving external trade logistics to meet global supply chain demands.

Such initiatives are projected to reduce costs, improve overall efficiency, and significantly enhance India’s competitiveness in global markets.

Job Creation and Gender Inclusion

Apart from economic benefits, the program prioritises creating substantial employment opportunities and promoting gender inclusion in the workforce. The reforms are expected to generate sustainable growth by integrating inclusive practices and fostering resilience in supply chains.

Strengthening Partnerships for Progress

This agreement reflects a shared commitment between India and ADB to foster innovation, growth, and sustainability in the logistics and manufacturing sectors. By addressing infrastructure and policy gaps, the program supports India’s broader economic development goals, including its ambition to become a global manufacturing hub.

The SMILE program aligns with India’s vision for sustainable development, combining strategic policy reforms and investments to drive economic transformation.