With a move aimed at boosting the manufacturing sector and fortifying national supply chains, the Government of India and the Asian Development Bank (ADB) has entered into a crucial agreement on December 15, 2023. The $250 million policy-based loan, part of the Industrial Corridor Development Programme’s second sub-programme, seeks to enhance the competitiveness of manufacturing, strengthen supply chains and foster regional and global value chain integration. The initiative also aims to generate more and better employment opportunities.
The loan agreement, signed by Ms. Juhi Mukherjee, Joint Secretary of the Department of Economic Affairs, Ministry of Finance, on behalf of the Government of India and Mr. Hoe Yun Jeong, Deputy Country Director and Officer-in-Charge of ADB’s India Resident Mission, signifies a continuation of support for industrial corridor development. This initiative aligns with the National Industrial Corridor Development Programme (NICDP), launched by the government in 2016 and updated in 2020 to improve the planning and management of designated industrial economic clusters, attracting private infrastructure and manufacturing investments.
Building on the success of the $250 million Sub-programme 1 loan approved by ADB in October 2021, which focused on strengthening policy frameworks and developing 11 industrial corridors, Sub-programme 2 takes a comprehensive approach. Ms. Juhi Mukherjee expressed gratitude for ADB’s consistent support in implementing NICDP effectively.
Mr. Hoe Yun Jeong highlighted the broader impact of the loan, emphasising its role in integrating industrial corridors with transport, logistics and urban facilities under the government’s Prime Minister Gati Shakti platform. In addition to promoting gender equality and providing training and up-skilling opportunities for workers, the second sub-programme will explore alternative financing solutions, including green finance, for industrial cluster development.
Recognising the importance of workplace safety, the initiative also aims to improve industrial safety standards and integrate environmental and climate change practices. The programme also focuses on creating a conducive investment climate that aligns with the ease of doing business, introducing a synchronised Central and State-level single window clearance system and digitising processes to streamline logistics.
The comprehensive approach of Sub-programme 2 is expected to have a transformative impact on various industrial nodes, covering diverse sectors such as agribusiness, automotive, electronics, food and beverages, heavy machinery, pharmaceuticals and textiles. By generating employment opportunities in these sectors, the programme aims to contribute significantly to poverty alleviation in the corridor states.
The Industrial Corridor Development Programme is set to play a pivotal role in shaping India’s economic landscape. The infusion of funds, coupled with strategic planning and collaboration between the government and ADB, is expected to stimulate economic growth, enhance competitiveness and foster sustainable development across the industrial corridors. The successful implementation of this programme holds the promise of a more resilient, interconnected and prosperous future for India’s manufacturing sector and its associated economic activities.
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