India develops its industrial corridors

The Government of India launched the National Industrial Corridor Development Program (NICDP) in 2016 and updated it in 2020 to strengthen the planning and management of designated industrial economic clusters to attract private infrastructure and manufacturing investments. ADB’s program supports the effective implementation of the NICDP.

Source: ADB

"The program is expected to create jobs in the manufacturing sector in industrial nodes, covering areas such as agribusiness, automotives, electronics, food and beverages, heavy machinery, pharmaceuticals, and textiles,” said ADB Senior Public Management Economist Sameer Khatiwada.  “It will lead to higher formalization of labor, increased productivity, and higher wages—factors that all directly contribute to alleviation of poverty in the corridor states.”

An industrial corridor involves the creation of an efficient multimodal transport network within a defined geography supported by quality infrastructure, logistics, skill development, a policy framework that facilitates doing business and setting up distribution networks that link production centers, urban centers, and international gateways like ports and airports. 

The loan supports subprogram 2 of the Industrial Corridor Development Program which will help develop multimodal logistics infrastructure in industrial corridors under the government’s Prime Minister Gati Shakti platform. It will promote gender equality in manufacturing and corridor development, as well as conduct training and upskilling of workers in industrial corridors.

In addition, the second subprogram will help industrial corridors develop alternative financing solutions, such as green finance, for industrial cluster development. It will also improve industrial workplace safety and integrate environment and climate change practices in these areas.

To help improve the investment climate, and in line with the ease of doing business, the program will introduce a synchronized central and state-level single window clearance system and digitize processes to streamline the logistics process. Private investors will be given access to land data in these industrial centers and sex-disaggregated labor force data to help with their investment decisions. 

This loan builds on the $250 million Subprogram 1 loan approved by ADB in October 2021 that helped strengthen policy frameworks for the NICDP and develop 11 industrial corridors./.