$350 Million policy-based loan aim to expand India’s manufacturing sector and improve the resilience of its supply chains

The Government of India and the Asian Development Bank (ADB) signed a $350 million policy-based loan under the second subprogram of Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program.

The signatories to the loan agreement were Department of Economic Affairs (DEA), Ministry of Finance; Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry; and the ADB.

The SMILE program is a programmatic policy-based loan (PBL) to support the government in undertaking wide-ranging reforms in the logistics sector in India. The programmatic approach comprises two subprograms, which aim to expand India’s manufacturing sector and improve the resilience of its supply chains.

The program establishes and operationalizes a comprehensive policy framework to enhance logistics efficiency through (i) strengthening the institutional bases for multimodal logistics infrastructure development at the national, state, and city levels; (ii) standardizing warehousing and other logistics assets to strengthen supply chains and incentivize greater private sector investment; (iii) improving efficiencies in external trade logistics; and (iv) adopting smart systems for efficient and low emission logistics.

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.

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.

Policy-based loan expands manufacturing resilience through logistics reforms and institutional and regulatory strengthening, with digital integration to boost efficiency. A programmatic policy-based loan under the SMILE second subprogram supports a coordinated reform agenda to expand manufacturing and strengthen supply chain resilience by operationalizing a comprehensive policy framework that: strengthens institutional bases for multimodal logistics at national, state and city levels; standardizes warehousing and logistics assets to attract private investment; improves external trade logistics efficiencies; and adopts smart, low-emission digital logistics systems.