The Asian Development Bank (ADB) has approved a US$350 million policy-based loan to support the Indian government’s reforms to strengthen and modernize the country’s logistics sector.

The loan will finance the second sub-programme 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.

This builds on reforms introduced during the first sub-programme by institutionalizing policies to strengthen inter-agency coordination as well as standardizing processes to encourage private sector investment and improve operational efficiency. 

The development of India’s logistics sector, the ADB says, is pivotal in enhancing the competitiveness of its manufacturing sector. Through strategic policy reforms, infrastructural improvements and digital integration, the government’s ongoing reforms are set to transform the logistics landscape.

The Indian government has launched several strategic policies to address logistics sector constraints, including the Prime Minister Gati Shakti-National Master Plan and the National Logistics Policy, which aim to improve infrastructure, streamline processes and promote digitization.

The ADB’s programmes have supported India’s reform efforts, which have improved the country'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.