Daily News Analysis

India’s Afghan investment

16th July, 2021 International Relations

Context:

  • The Taliban's possible triumph threatens not just India's diplomatic stakes in Afghanistan, but also 20 years and $3 billion worth of Indian investment in various projects — dams, roads, trade infrastructure.

 

Background:

  • As the Taliban push ahead with military offensives across Afghanistan, preparing to take over after the exit of US and NATO forces.
  • India faces a situation in which it may have no role to play in that country, and in the worst case scenario, not even a diplomatic presence.
  • That would be a reversal of nearly 20 years of rebuilding a relationship that goes back centuries.

 

Why Afghanistan matters to India?

  • Afghanistan is vital to India’s strategic interests in the region.
  • It is also perhaps the only SAARC nation whose people have much affection for India.
  • After a break between 1996 and 2001, when India joined the world in shunning the previous Taliban regime, one way New Delhi re-established ties with the country was to pour in development assistance.

 

India’s development assistance:

  • India built vital roads, dams, electricity transmission lines and substations, schools and hospitals, etc.
  • India’s development assistance is now estimated to be worth well over $3 billion.
  • And unlike in other countries where India’s infrastructure projects have barely got off the ground or are mired in the host nation’s politics, it has delivered in Afghanistan.
  • The 2011 India-Afghanistan Strategic Partnership Agreement recommitted Indian assistance to
    • help rebuild Afghanistan’s infrastructure and institutions;
    • education and technical assistance for capacity-building in many areas;
    • encourage investment in Afghanistan; and
    • provide duty-free access to the Indian market.
  • Bilateral trade is now worth $1 billion.
  • No part of Afghanistan today is untouched by the 400-plus projects that India has undertaken in all 34 of Afghanistan’s provinces. The fate of these projects is now up in the air.

 

India’s major project in Afghanistan:

SALMA DAM: The hydropower and irrigation project, completed against many odds and inaugurated in 2016, is known as the Afghan-India Friendship Dam. The Taliban claim the area around the dam is now under their control.

 

ZARANJ-DELARAM HIGHWAY: The other high-profile project was the 218-km Zaranj-Delaram highway built by the Border Roads Organisation. Zaranj is located close to Afghanistan’s border with Iran. With Pakistan denying India overland access for trade with Afghanistan, the highway is of strategic importance to New Delhi, as it provides an alternative route into landlocked Afghanistan through Iran’s Chabahar port.

 

PARLIAMENT: The Afghan Parliament in Kabul was built by India at $90 million. A block in the building is named after former PM AB Vajpayee.

 

STOR PALACE: In 2016, Afghan President Ashraf Ghani and Prime Minister Modi inaugurated the restored Stor Palace in Kabul, originally built in the late 19th century. In 2009, India, Afghanistan, and the Aga Khan Development Network signed a tripartite agreement for its restoration. The Aga Khan Trust for Culture completed the project between 2013 and 2016.

 

POWER INFRA: Other Indian projects in Afghanistan include the rebuilding of power infrastructure such as the 220kV DC transmission line from Pul-e-Khumri, capital of Baghlan province to the north of Kabul, to beef up electricity supply to the capital. Indian contractors and workers also restored telecommunications infrastructure in many provinces.

 

HEALTH INFRA: India has reconstructed a children’s hospital it had helped build in Kabul in 1972 —named Indira Gandhi Institute for Child Health in 1985 — that was in a shambles after the war. ‘Indian Medical Missions’ have held free consultation camps in several areas. Thousands who lost their limbs after stepping on mines left over from the war have been fitted with the Jaipur Foot. India has also built clinics in the border provinces of Badakhshan, Balkh, Kandahar, Khost, Kunar, Nangarhar, Nimruz, Nooristan, Paktia and Paktika.

 

TRANSPORTATION: According to the MEA, India gifted 400 buses and 200 mini-buses for urban transportation, 105 utility vehicles for municipalities, 285 military vehicles for the Afghan National Army, and 10 ambulances for public hospitals in five cities. It also gave three Air India aircraft to Ariana, the Afghan national carrier, when it was restarting operations.

 

OTHER PROJECTS: India has contributed desks and benches for schools, and built solar panels in remote villages, and Sulabh toilet blocks in Kabul. New Delhi has also played a role in building capacity, with vocational training institutes, scholarships to Afghan students, mentoring programmes in the civil service, and training for doctors and others.

 

ONGOING PROJECTS: India had concluded with Afghanistan an agreement for the construction of the Shatoot Dam in Kabul district, which would provide safe drinking water to 2 million residents.

  • India pledged $1 million for another Aga Khan heritage project, the restoration of the Bala Hissar Fort south of Kabul, whose origins go back to the 6th century.
  • Bala Hissar went on to become a significant Mughal fort, parts of it were rebuilt by Jahangir, and it was used as a residence by Shah Jahan.

 

Bilateral trade relations

  • Despite the denial of an overland route by Pakistan, India-Afghanistan trade has grown with the establishment in 2017 of an air freight corridor.
  • In 2019-20, bilateral trade crossed $1.3 billion, the balance of trade is heavily tilted — exports from India are worth approximately $900 million, while Afghanistan’s exports to India are about $500 million.
  • Afghan exports are mainly fresh and dried fruit. Some of this comes overland through the Wagah border; Pakistan has permitted Afghan trade with India through its territory.
  • Indian exports to Afghanistan take place mainly through government-to-government contracts with Indian companies. Exports include pharmaceuticals, medical equipment, computers and related materials, cement, and sugar.
  • Two air corridors — Kabul-Delhi and Herat-Delhi — are in operation now.
  • Trade through Chabahar started in 2017 but is restricted by the absence of connectivity from the port to the Afghan border. Trade volumes are minuscule.

https://indianexpress.com/article/explained/explained-indias-afghan-investment-7406795/