India: Program for Growth, Resilience, Energy Security and Sustainability

OBJECTIVE

The Program supports India’s short-term policy and institutional measures and public expenditure allocations aimed at sustaining economic activity, safeguarding social stability and strengthening resilience.

DESCRIPTION

India relies significantly on imported energy and agricultural inputs, including crude oil, LNG, LPG, pulses, oilseeds, and fertilizer inputs. India also faces a gap between development needs and available public resources, especially for infrastructure and climate-related investment. Growth has remained robust, but employment generation has been uneven. Agriculture still absorbs a large share of the workforce.

The situation in the Middle East may potentially affect the Indian economy through higher energy prices, risks to fuel and fertilizer supply, trade disruption, supply chain bottlenecks, and tighter global financial conditions. Higher crude prices, shipping delays, and rising fertilizer costs may increase pressure on energy affordability, food-related costs, and business conditions, particularly for exporters and firms with limited margins.

India has implemented pre-emptive measures to mitigate the effect of any potential pressure arising from these developments. It has adopted short term policies to help keep fuel and food supplies flowing, support businesses and exporters, protect poorer households from higher prices, and stabilize fertilizer prices for farmers.�

AIIB will provide financing to support India’s pre-emptive short-term policy measures to support food, energy, and economic security for poor and vulnerable households, farmers, and small enterprises. This may also help reduce risks to ongoing infrastructure investment from fiscal reprioritization toward the aforementioned measures.

Program Approach and Focus Areas: The Program comprises three focus areas and policy measures to support trade resilience, energy security, food and rural income protection. These measures support business and export continuity, gas and cooking fuel supply, and assistance to farmers and rural households through fertilizer support and expanded employment measures. Overall, the Program is intended to support a short -term relief measures, with expected results over a two-year period.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization. AIIB’s Environmental and Social Policy (ESP), individual Environmental and Social Standards (ESS) and Environmental and Social Exclusion List (ESEL), applies to the Program Actions supported by the Bank. ESS 1 (Environmental and Social Assessment and Management) is applicable to address the Project’s E&S risks and impacts. A desktop-based E&S due diligence was undertaken using a rapid assessment approach. The review indicates that the Program is not expected to give rise to any significant E&S impacts. Therefore, the Program is classified as Category C in accordance with ESP. For Policy Actions that may result in potential or likely adverse impacts, established legal, policy, and institutional frameworks are in place to ensure that appropriate safeguards are applied to mitigate such impacts. 

Environmental and Social Aspects: Based on the assessment of the policy actions, it is expected to generate neutral to positive environmental impacts, including preventing shifts to more polluting fuels due to gas supply constraints, strengthening response mechanisms for maritime environmental risks through insurance provisions, and enhancing soil quality through nutrient supplementation. The implementing agency will be provided with the Exclusion List to exclude investments in goods that are part of the AIIB’s ESEL. Based on the PT’s assessment, most policy actions are expected to have neutral to positive environmental and social impacts, with financial support to crisis-affected sectors (e.g., maritime transport and export logistics) likely to safeguard livelihoods. Measures such as prioritizing LPG supply to households and fertilizer industries, along with subsidies for monsoon crops, are expected to enhance energy access, reduce financial stress on small farmers, and strengthen food and agriculture outcomes. 

Potential downstream risks associated with labor management and Health and safety are addressed through institutional and legal safeguards embedded in the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-GRAM G Act, 2025). Health and safety risks, including labour and workplace conditions, are similarly mitigated through defined roles, responsibilities, safeguard actions, and oversight mechanisms embedded in the Act. 

Project Grievance Redress Mechanism (GR). The program will be operated under the oversight of Department of Economic Affairs (DEA). DEA has its GRM and webpage dedicated to grievance redressal. Further the member has Centralized Public Grievance Redress and Monitoring System (CPGRAMS), which is a 24×7 online platform that enables citizens to lodge grievances with public authorities on issues related to service delivery. It serves as a unified portal linked to all Ministries and Departments of the Government of India as well as State Governments, with role-based access for officials. CPGRAMS is also accessible through a standalone mobile application (available on Google Play) and via integration with the UMANG app. 

Monitoring and Reporting Arrangement. The government has established institutional arrangements to monitor implementation of the RPBF results. The Department of Economic Affairs (DEA) will coordinate implementation, consolidate progress updates, and engage with AIIB, with line ministries tracking and reporting progress through existing administrative systems. DEA will consolidate data from the respective line ministries on the progress of reform measures and results indicators. Monitoring will be conducted annually, with the DEA aggregating progress updates. The monitoring system will rely primarily on sectoral data maintained by line ministries and standardized reporting mechanisms.