ADB approves $350 million loan to boost India’s logistics sector, create jobs
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In a bid to help India strengthen and modernise its logistics sector, the Asian Development Bank (ADB) has approved a $350 million policy-based loan to support wide-ranging reforms in the sector.
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.
The loan will finance the second subprogramme of the ‘Strengthening Multimodal and Integrated Logistics Ecosystem Programme’, which supports the government’s efforts to create a comprehensive policy, planning, and institutional framework at the federal, state, and city levels.
The government 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).
“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 Sameer Khatiwada, ADB Senior Public Management Economist.
“The integration of digital technologies and standardised processes facilitates smoother movement of goods, which is crucial for manufacturing growth,” Khatiwada added.
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.
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.
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.
Through strategic policy reforms, infrastructural improvements, and digital integration, the government’s ongoing reforms are set to transform the logistics landscape, said ADB.
