India's Investment In Afghanistan: A Strategic Move

India has invested heavily in Afghanistan's development projects, spending over $3 billion in the past two decades. The investments include infrastructure projects such as roads, dams, schools, and the new Afghan Parliament building in Kabul, built by India for $90 million and inaugurated in 2015. India has also provided humanitarian assistance, community development, and enhanced trade through air and land connectivity. One of the main goals of India's approach toward Afghanistan has been to ensure the country doesn't fall under the influence of its rival, Pakistan, and instead, the US-backed Kabul government remains aligned with New Delhi's interests. However, with the Taliban's swift takeover of Afghanistan following the US withdrawal, the future of India's investments and diplomatic presence in the country is uncertain.

To counter Pakistan's influence

India's investments in Afghanistan are largely motivated by its desire to counter Pakistan's influence in the region. Pakistan and India are rivals, and with Pakistan wielding influence over the Taliban, India is keen to secure its interests in Afghanistan and prevent the country from falling under the control of a Pakistan-backed Taliban regime.

India has invested over $3 billion in Afghanistan, focusing on infrastructure development, including roads, dams, schools, and the new Afghan parliament building. These investments are part of India's "Neighbourhood First" foreign policy approach, which aims to maintain peace and mutually beneficial relationships in the region. India's investments also serve to counter China's Belt and Road Initiative, which seeks to increase Chinese influence in the region through infrastructure projects.

By investing in Afghanistan, India hopes to gain a strategic foothold in the country and prevent it from becoming a security threat across South and Central Asia. India's Chief of Defense Staff, Bipin Rawat, has expressed concerns about engaging directly with the Taliban due to their close ties with the Pakistani intelligence community. However, some experts believe that India's perception of the Taliban may change due to the evolving circumstances in Afghanistan, and that increased engagement with the Taliban could provide India with more influence over the group.

The Taliban's takeover of Afghanistan has created uncertainty for India's investments and trade ties with the country. India is one of Afghanistan's biggest trade partners, particularly for agricultural products such as dried fruits. With the Taliban sealing some border crossings with Pakistan, which serve as the primary land routes for trade between India and Afghanistan, Indian businesses are concerned about the impact on their exports and imports.

The future of India's relationship with a Taliban-led Afghanistan remains unclear, and India is adopting a wait and watch approach. However, experts believe that the Taliban will seek to establish good relations with regional countries, including India, to attract foreign investment and increase regional trade.

To improve regional connectivity

India has invested in Afghanistan to improve regional connectivity by building infrastructure and developing trade routes. Afghanistan is located in a strategic area that links South Asia and Central Asia, and improving regional connectivity in the region is one of India's key interests.

One of the most notable infrastructure projects India has undertaken in Afghanistan is the construction of the Afghan Parliament in Kabul, which was built at a cost of $90 million and inaugurated in 2015. In addition to this, India has also been involved in the construction of roads, dams, and power plants in Afghanistan. For example, the Salma Dam in Herat province—also known as the Afghan-India Friendship Dam—which was completed in 2016 and provides both hydropower and irrigation. Another significant road project is the Zaranj-Delaram Highway, which provides an alternative trade route into landlocked Afghanistan through Iran's Chabahar port, bypassing Pakistan.

In addition to infrastructure projects, India has also invested in improving trade connectivity with Afghanistan. Bilateral trade between the two countries is now worth over $1 billion, with Indian exports to Afghanistan including pharmaceuticals, medical equipment, computers, and cement. To further enhance trade relations, India and Afghanistan established an air freight corridor in 2017, and two air corridors—Kabul-Delhi and Herat-Delhi—are currently in operation.

Through these infrastructure and trade initiatives, India aims to improve regional connectivity and enhance its influence in the region.

To gain public trust and political goodwill

India's investments in Afghanistan have been motivated by a desire to gain public trust and political goodwill, according to Gautam Mukhopadhaya, the Indian ambassador to Afghanistan between 2010 and 2013. These investments were gifts for the Afghan people, and not meant to be used as political leverage.

Indeed, India has invested over $3 billion in Afghanistan over the past two decades, focusing on infrastructure and humanitarian projects. These include the construction of roads, dams, schools, hospitals, and the new Afghan Parliament building in Kabul, inaugurated by Indian Prime Minister Narendra Modi in 2015.

One of the most significant Indian investments in Afghanistan is the Zaranj-Delaram highway, which helps connect India to Afghanistan through Iran's Chabahar port. This $150 million highway is strategically important for India as it bypasses Pakistan, which does not allow India to transport goods through its territory.

Another notable project is the Salma Dam in Herat province, also known as the Afghan-India Friendship Dam. Completed in 2016, the dam provides irrigation and electricity to the surrounding areas. With an estimated cost of around $275 million, it is one of the most expensive infrastructure projects undertaken by India in the region.

In addition to these large-scale projects, India has also committed to developing small and medium-scale projects in Afghanistan, including in the areas of education, health, water management, and sports facilities. It has also offered scholarships to Afghan students to study in India, further contributing to its goal of gaining public trust and political goodwill in the country.

By investing in Afghanistan's infrastructure and development, India has not only gained goodwill but has also positioned itself as a key trade partner for Afghanistan. India is now one of Afghanistan's biggest trade partners, with bilateral trade exceeding $1 billion. Afghan exports to India include fresh and dried fruit, carpets, and wool, while Indian exports to Afghanistan include pharmaceuticals, medical equipment, computers, cement, and sugar.

However, the Taliban's takeover of Afghanistan presents challenges to these economic and diplomatic ties. With the Taliban having sealed some of Afghanistan's borders with Pakistan, which were the only land routes for trade with India, the future of these trade relations is uncertain.

To limit the influence of Islamist militants

India has been investing in Afghanistan to limit the influence of Islamist militants, particularly those backed by Pakistan.

India has accused Pakistan of supporting Islamist militants in the region as proxies against India. Pakistan's intelligence community, the ISI, is believed to have close ties with the Taliban. As such, India has sought to establish a strategic foothold in Afghanistan to prevent the country from falling into the hands of the Taliban or similar forces.

India's investments in Afghanistan have focused on developing the country's infrastructure, including roads, dams, electricity transmission lines, and schools. These projects are intended to win the hearts and minds of the Afghan people and establish goodwill. By improving Afghanistan's infrastructure, India also gains increased access to the landlocked country, bypassing Pakistan, and reducing the Afghan economy's dependence on its rival.

Additionally, India has sought to strengthen Afghanistan's security apparatus and intelligence capabilities. India has provided military assistance, including training for Afghan security personnel and the donation of military equipment, such as attack helicopters.

However, with the Taliban's swift takeover of Afghanistan following the US withdrawal, the future of India's investments in the country is uncertain. India's policy of soft power and engagement with the Afghan people may not be enough to counter the influence of Islamist militants, especially if the Taliban government dismantles the Afghan security structure that India has helped build.

To tap into Afghanistan's resources

Afghanistan has an abundance of untapped natural resources, including both known and potential deposits of a wide variety of minerals. The country has over 1,400 mineral fields, containing barite, chromite, coal, copper, gold, iron ore, lead, natural gas, petroleum, precious and semi-precious stones, salt, sulfur, lithium, talc, and zinc, among many other minerals. Afghanistan's resources could make it one of the richest mining regions in the world.

The country's mining industry was previously at an artisanal stage of development, with all operations being low-scale and output supplied to local and regional markets. However, the Afghan government considered the development of the country's mineral resources to be a priority for economic growth. This included the development of industrial mineral resources, such as gravel, sand, and limestone for use by the domestic construction industry.

India, recognizing the potential of Afghanistan's mineral wealth, has invested in the country's mining sector. In 2007, a 30-year lease was granted to the China Metallurgical Group for the development of a copper mine at Mes Aynak in Logar Province. The deposit is believed to contain the second-largest reserves of copper ore in the world and is estimated to be worth up to $88 billion.

In addition to copper, Afghanistan has rich reserves of coking coal, primarily located within a Jurassic belt stretching from the northern provinces of Takhar and Badakhshan to the western province of Herat. The country also has an estimated 1.8 billion barrels of oil between Balkh and Jawzjan Province in the north, which was discovered in 2010.

Afghanistan's lithium deposits are also of significant interest. The country's lithium occurs in dry lake beds in the western provinces of Herat and Nimroz and the central-eastern province of Ghazni. Afghanistan's geologic setting for lithium is similar to that of Bolivia and Chile, which are major producers of this critical metal used in rechargeable batteries.

India's investments in Afghanistan's mining sector include the following:

• The Hajigak iron ore project in Bamyan Province: This project involves the development of one of the largest iron oxide deposits in Afghanistan, with a potential to become a significant source of iron ore for the global market.
• Aynak copper project in Logar Province: India was one of the bidders for this project, which was eventually awarded to a Chinese company.
• Exploration of copper at Balkhab, gold at Badakhshan, gemstones and lithium at Nuristan, and oil and gas at Sheberghan: The Afghan government planned to offer tenders for exploration in these areas, providing opportunities for Indian companies to participate.

By investing in Afghanistan's mining sector, India gains access to the country's vast mineral wealth, which has the potential to fuel economic growth and development.

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