ADB Approves $350M Loan to Boost India’s Logistics Sector and Economic Competitiveness

Policy-Based Loan to Accelerate Infrastructure Reforms, Digital Integration, and Job Creation in Logistics.

The Asian Development Bank (ADB) has approved a $350 million policy-based loan to support the Government of India’s ambitious reforms aimed at strengthening and modernizing its logistics sector. This funding will help transform the sector, enhancing economic competitiveness and supporting the government’s target of achieving $2 trillion in goods and services exports by 2030.

Supporting Multimodal Logistics Development

The loan will fund the second subprogram of the Strengthening Multimodal and Integrated Logistics Ecosystem Program, which focuses on creating a robust policy, planning, and institutional framework across federal, state, and city levels. Building on reforms initiated during the first subprogram, this phase institutionalizes strategies for interagency coordination, streamlines processes, and promotes private sector participation to improve operational efficiency.

Key reforms include:

Establishing logistics planning mechanisms at the state and city levels.

Implementing green transition guidelines for inland waterways.

Advancing a grain storage plan to enhance food security and supply chain resilience.

Impact on Manufacturing and Export Competitiveness

India’s logistics sector plays a pivotal role in boosting the manufacturing industry’s efficiency and competitiveness. The integration of digital technologies and standardized processes has reduced logistics costs, improved supply chain resilience, and enhanced export potential.

Between 2000 and 2022, India’s goods exports increased nearly tenfold, from $48.5 billion to $467.5 billion, while industrial exports surged from $39.6 billion to $317.4 billion. These reforms align with government initiatives like the Prime Minister Gati Shakti-National Master Plan (PMGS-NMP) and the National Logistics Policy (NLP), which aim to modernize infrastructure and streamline logistics processes.

“The development of the logistics sector directly impacts the competitiveness of manufacturing industries,” said ADB Senior Public Management Economist Sameer Khatiwada. “Improved logistics efficiency reduces transaction costs, strengthens supply chains, and supports export growth.”

Digitization and Employment Generation

The government’s reforms, coupled with ADB’s support, are creating substantial employment opportunities across urban and rural regions. Increased private sector investment and process efficiencies are driving demand for skilled workers in logistics. Digitization and automation are also introducing new roles, aligning with the industry’s evolving needs.

Efforts to modernize logistics are contributing to job creation and gender inclusion while reducing greenhouse gas emissions through green initiatives.

Green Logistics for Sustainable Growth

The program emphasizes environmentally sustainable logistics practices, including the adoption of cleaner energy sources and improved infrastructure for inland waterways. These efforts not only reduce carbon footprints but also support India’s commitments to climate goals.

Path to $2 Trillion Exports by 2030

India’s ambitious target of achieving $2 trillion in goods and services exports by 2030 is supported by these logistics sector reforms. Improved productivity, streamlined movement of goods, and reduced transaction costs are expected to propel India closer to its export aspirations.

ADB’s Continued Support

With the approval of this loan, ADB reaffirms its commitment to India’s growth by driving infrastructure development, fostering economic resilience, and promoting sustainability. By addressing critical logistics bottlenecks, the program strengthens India’s position as a global trade hub while delivering long-term socioeconomic benefits.