ADB approves US$250 million loan to strengthen Logistics Sector in India

New Delhi, India (Urban Transport News): The Asian Development Bank (ADB) has approved a US$250 million policy-based loan to support the Government of India’s wide-ranging reforms that aim to strengthen and modernize the country’s logistics infrastructure, improve efficiency, and lower the cost in the logistics sector.

The loan will finance the first subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem Program, 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 emission.

The program will help to strengthen supply chains 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.

India’s recently approved National Logistics Policy and the Prime Minister Gati Shakti–National Master Plan provide transformative institutional and regulatory frameworks for holistic development of the logistics ecosystem in the country and lays the foundation for building a modern and efficient logistics sector.

“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,” said Sabyasachi Mitra, Director of Public Management, Financial Sector and Trade (South Asia), ADB.

To facilitate multimodal logistics, the subprogram promotes reforms that reduce cumbersome processes that businesses face 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.   

The program also supports the Ministry of Commerce and Industry’s initiatives to issue standards for warehousing, which would encourage operational efficiency and private sector investment.