ADB-Funded SMILE Program to Enhance India’s Logistics Efficiency and Reduce Costs

The Asian Development Bank (ADB) has funded the Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) Program to improve India’s logistics infrastructure, lower logistics costs, and increase efficiency. The initiative supports the implementation of the National Logistics Policy (NLP) and PM Gati Shakti National Master Plan by promoting multimodal logistics, warehousing standardization, and digital transformation in trade logistics.

Introduction to the SMILE Program

The Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) Program is a transformative initiative aimed at overhauling India’s logistics infrastructure. The program seeks to optimize the logistics sector by integrating multimodal transportation networks, standardizing warehousing practices, and digitizing trade logistics.

By addressing inefficiencies in logistics, the program aims to bolster India’s competitiveness in global trade while reducing costs and enhancing the resilience of supply chains. The SMILE Program is crucial for aligning India’s logistics sector with global standards and making India a manufacturing and supply chain hub.

Objectives of the SMILE Program

The ADB-funded SMILE Program has been designed to establish a policy framework that enhances logistics efficiency through:

1. Strengthening Institutional Infrastructure

• The program will reinforce the institutional framework at the National, State, and City levels to facilitate the development of multimodal logistics infrastructure.
• It will ensure seamless integration of different modes of transport, including road, rail, air, and waterways, to create a cohesive logistics ecosystem.

2. Standardizing Warehousing and Logistics Assets

• The program promotes the standardization of warehouses and logistics assets to improve supply chain efficiency.
• It seeks to attract private sector investments in logistics infrastructure by ensuring uniformity in storage facilities and logistics parks.

3. Enhancing External Trade Logistics Efficiency

• The initiative will focus on improving port connectivity, streamlining customs clearance, and enhancing trade facilitation.
• This will help exporters and importers by reducing time and cost associated with international trade logistics.

4. Digital Transformation in Logistics

• The program promotes the adoption of smart logistics systems to enable real-time tracking, automated processes, and data-driven decision-making.
• It focuses on reducing carbon emissions by adopting sustainable logistics solutions, including electric vehicles and alternative fuels.

Impact on India’s Logistics Performance and Competitiveness

The SMILE Program is expected to have a significant impact on India’s logistics sector and its ranking in the Logistics Performance Index (LPI). The initiative will:

• Improve logistics competitiveness and reduce supply chain bottlenecks.
• Lower the overall cost of logistics, which currently stands at 13-14% of India’s GDP, compared to 8-9% in developed countries.
• Enhance job creation in the logistics sector by facilitating the growth of private investments.

Gender Inclusion Measures in SMILE Program

The program incorporates gender-inclusive policies to ensure equal opportunities for women in the logistics sector. The key gender-focused initiatives include:

• Conducting gender audits of land ports to assess the level of gender inclusivity in trade logistics.
• Ensuring that integrated check posts (ICPs) across India meet minimum gender responsiveness standards.
• Encouraging women’s participation in trade logistics through skill development programs and employment opportunities.

Alignment with Atmanirbhar Bharat and Economic Growth

The SMILE Program supports Atmanirbhar Bharat (Self-Reliant India) by strengthening domestic manufacturing, reducing dependency on inefficient logistics, and improving integration into the global trade network.

By improving logistics efficiency, the program will:

• Reduce delays in the supply chain, benefiting Indian exporters and manufacturers.
• Strengthen India’s position as a global manufacturing hub.
• Encourage foreign direct investment (FDI) in logistics and transportation.

Summary of SMILE Program