ADB's Work in India

The Asian Development Bank (ADB) supports India’s economic recovery and its coronavirus disease (COVID-19) response. A vigorous COVID-19 vaccination drive and public investments to boost infrastructure and health services helped India’s economy rebound in 2021 with projected 8.9% growth of gross domestic product. India’s economy had contracted 6.6% in 2020 due to the pandemic following a steady 6.7% average annual growth achieved during 2010-2019. Growth is expected to remain strong in 2022 and 2023 buoyed by investment, with public investment helping encourage private investment. A founding member of ADB in 1966, India is now ADB’s fourth largest shareholder and its top borrower since 2010. ADB’s operations remain aligned to India’s evolving development priorities. ADB supports building India’s economic competitiveness and job creation, helps address climate-related challenges, and assists low-income states. ADB also promotes private sector development, gender empowerment, regional integration, and knowledge services along with capacity development.

To date, ADB has committed 589 public sector loans, grants, and technical assistance totaling $50.8 billion to India. Cumulative loan and grant disbursements to India amount to $36.9 billion. These were financed by regular ordinary capital resources, and other special funds. ADB’s ongoing sovereign portfolio in India includes 66 loans and 1 grant worth $15 billion.

In 2021, ADB committed a record $4.6 billion in sovereign loans to India. ADB also committed $36.51 million in technical assistance and $3 million in grants under the sovereign portfolio. The sovereign loans included assistance under the vaccine access facility, in addition to the regular program supporting urban development, transport, agriculture, finance, and skills building.

ADB committed a $250 million loan to increase India’s industrial competitiveness and help create jobs. Another $484 million loan will strengthen road connectivity to facilitate industrial development in the Chennai–Kanyakumari Industrial Corridor, which is part of the ADB-supported East Coast Economic Corridor.

A $500 million loan will help improve mobility in Bengaluru city through a metro rail project, and a $350 million loan will accelerate policy action to expand access to water, sanitation, and affordable housing. ADB also extended a $251 million loan to strengthen flood-risk management in Chennai’s urban areas. Other urban projects will support affordable housing in Tamil Nadu and improve urban services in Jharkhand, Tripura, and Uttarakhand.

To strengthen the rural economy, a $300 million loan was committed to improve rural connectivity in Maharashtra and another $100 million loan was provided to promote agribusiness networks to increase farm incomes in the state. ADB committed $112 million to set up a skills university in Assam to strengthen education in industry-aligned skills to boost employment. ADB also committed funds to help plan and design an urban mobility project in Mizoram and a road project in Sikkim.

Consultation with a doctor at the Medanta Hospital in Gurugram, India. Photo: Amit Verma/ADB

Nonsovereign operations. Through its private sector operations, ADB committed $274 million from its own sources for eight projects in India in 2021. This included two projects to enhance critical care capacity and diagnostic services for COVID-19. Other investments provided for road construction equipment, highways upgrade, energy efficiency, affordable housing for vulnerable groups, and an animal healthcare project to boost farmer incomes. ADB also committed a total of $147 million in India through its Supply Chain Finance Program and Microfinance Risk Participation and Guarantee Program. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in India as of 31 December 2021 was $3.21 billion representing 22.82% of ADB’s total private sector portfolio.

Operational challenges. ADB operations cover more than 20 states in India and involve a diverse range of stakeholders, requiring a differentiated approach. ADB support to lower-income states focuses on infrastructure and services to accelerate inclusive economic growth, while support to relatively higher-income states include transformative projects with innovation and good practices for replicability across the country.

ADB’s main challenge is developing synergistic institutional arrangements that transcend sectors, which could be addressed through strategic studies and project preparatory work. Other issues are planning and managing multisector projects and ensuring close collaboration between public and private sector operations. Challenges brought about by the pandemic involve how to support India’s medium- to long-term recovery by enhancing assistance to micro, small, and medium-sized enterprises, health, education, and social protection. ADB support to boost the Government of India’s infrastructure financing also depends on the volume and type of private sector investments available.

COVID-19 Response

ADB provided $1.8 billion for India’s COVID-19 response, comprising $1.5 billion to procure vaccines and $300 million to strengthen primary health care in urban areas and enhance the country’s pandemic preparedness. ADB also helped India strengthen its vaccine delivery system, monitor pandemic trends, and raise awareness on pandemic protocols.

Knowledge Work

ADB provides knowledge support to India on policy issues, identifying transformative investments, and reform opportunities to address the complex development challenges that the country faces. In 2021, an ADB study examined the feasibility of developing an economic corridor in India’s northeast. Another study mapped India’s industrial land bank and constructed a framework to identify interventions to upgrade the industrial cluster ecosystem to attract investment. In all, ADB published nine publications including studies on improving India’s logistics efficiency, enhancing the competitiveness and productivity of micro, small and medium enterprises (MSMEs), and increasing Assam’s trade with neighboring countries and Southeast Asia.

ADB’s capacity development resource center held knowledge sharing webinars on project design and implementation issues including the pandemic-related challenges for project agencies.

  ADB Projects in India Project data sheets for loans, grants, TAs

Future Directions

ADB’s program for India over 2022–2024 supports the country’s fast, green, and inclusive COVID-19 recovery, and in doing so, continues to fine-tune its operations with the government’s priorities, ADB’s Strategy 2030, and the upcoming India country partnership strategy which is to cover 2023-2027. To help India emerge quickly from the COVID-19 pandemic, ADB will support the strengthening of India’s healthcare systems, helping industries bounce back, and providing social protection to vulnerable groups. ADB will enhance investments in health and education, finance, MSMEs, and public sector management. It will help boost economic activity, improve investment competitiveness, promote private sector development and enhance last-mile connectivity to supply chains. Less-developed states will continue to receive financing support for basic infrastructure and institutional capacity building. Transformative initiatives aimed at supporting economic corridor development and logistics improvement will be pursued in the more economically advanced states.

ADB will strategically engage with states and undertake knowledge work to identify and support their emerging development needs. ADB will also help India meet its climate action commitments. Other support areas will include promoting gender equity, strengthening governance and institutions, increasing digitalization across sectors, and promoting regional cooperation and integration. ADB will not only focus on traditional areas of support but keep up with India’s evolving development needs by channeling financing to emerging areas including those with multidisciplinary elements. ADB will also continue to explore and diversify its financing products and modalities to suit operational needs. Innovative financing approaches will be pursued to promote private sector investment and maximize synergies between ADB’s sovereign and nonsovereign operations.