On December 20, 2024, the Government of India and the Asian Development Bank (ADB) signed a $350 million policy-based loan aimed at expanding India's manufacturing sector and improving the resilience of its supply chains. This loan is part of the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) program.

Key Points:

• Loan Agreement Signatories:
  • Department of Economic Affairs (DEA), Ministry of Finance, Government of India
  • Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry
  • Asian Development Bank (ADB)
• SMILE Program:
  • Goal: Strengthen the logistics ecosystem to enhance India's manufacturing sector and improve supply chain resilience.
  • Structure: The program includes two subprograms focusing on strategic reforms in logistics and infrastructure development.
• Key Features of the SMILE Program:
  • Strengthening Multimodal Infrastructure: Enhances logistics infrastructure at the national, state, and city levels.
  • Standardization: Improves warehousing and other logistics assets to attract private sector investment.
  • External Trade Logistics: Enhances efficiencies in external trade logistics.
  • Smart Systems: Adopts systems for efficient, low-emission logistics to promote sustainability.
• Expected Outcomes:
  • Cost Reduction & Efficiency: Strategic reforms will reduce logistics costs and improve efficiency.
  • Job Creation: Infrastructure development and reforms are expected to generate substantial employment opportunities.
  • Gender Inclusion: The program promotes gender inclusion through economic growth initiatives.
• Impact on India’s Economy:
  • The transformation of India’s logistics sector will enhance the competitiveness of the manufacturing sector and drive sustainable economic growth.

About the Asian Development Bank (ADB):

• Headquarters: Mandaluyong, Metro Manila, Philippines.
• Established: December 19, 1966.
• Members: 69 countries, including both regional (e.g., India, China) and non-regional (e.g., USA, Japan) members.
• Function: ADB promotes social and economic development in Asia and the Pacific, providing loans, grants, and technical assistance for development projects.
• Key Shareholders:
  • Japan: 15.57%
  • USA: 15.57%
  • India: 6.32%
  • China: 6.43%
  • Australia: 5.77%