Explained: India’s Afghanistan investment

What is the News?

Taliban’s possible takeover in Afghanistan 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.

India’s Investment in Afghanistan:

• India has built vital roads, dams, electricity transmission lines and substations, schools, and hospitals among others in Afghanistan.
• India’s development assistance is now estimated to be worth well over $3 billion.
• The 2011 India-Afghanistan Strategic Partnership Agreement recommitted Indian assistance to help rebuild Afghanistan’s infrastructure and institutions.

Bilateral Trade:

• India-Afghanistan Bilateral 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 towards India, as 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 and through two air corridors — Kabul-Delhi and Herat-Delhi.
• However, trade through Chabahar which was started in 2017 is restricted now due to absence of connectivity from the port to the Afghan border.

India’s Projects in Afghanistan:

• Salma Dam: It is a dam located on the Hari River in Herat Province in Afghanistan. Since this dam was constructed by the Government of India, the Afghan cabinet has renamed the Salma Dam as the Afghan-India Friendship Dam.
• Zaranj-Delaram highway: It is a 218 km Highway built by India’s Border Roads Organisation. Zaranj is located close to Afghanistan’s border with Iran.
• Parliament: The Afghan Parliament in Kabul was built by India at $90 million. It was opened in 2015.
• Stor Palace: In 2016, Afghan President and Indian Prime Minister Modi inaugurated the restored Stor Palace in Kabul, originally built in the late 19th century. The palace was the setting for the 1919 Rawalpindi Agreement by which Afghanistan became an independent country.

Ongoing Projects:

• Shahtoot Dam: It is a proposed dam to be built by India in the Kabul river basin in Afghanistan. The dam would provide safe drinking water to 2 million residents of Kabul.
• India also pledged $1 million for the Aga Khan heritage project and for the restoration of the Bala Hisar Fort in south Kabul.
  • Bala Hisar Fort’s origin goes back to the 6th century. The fort was a significant Mughal fort, parts of it were rebuilt by Jahangir, and it was used as a residence by Shah Jahan.