Indian companies make push for Afghan contracts

Published April 8, 2012

KABUL, Afghanistan — India, having spent $1.5 billion over a decade on Afghan roads, power lines, schools and the parliament, now is proposing what may become Afghanistan's biggest foreign investment: $11 billion to build an iron mine, steel mill and railroad.

"India is showing its commitment to an unprecedented ambition and role in Afghanistan," said Raja Mohan, a senior fellow at the independent Center for Policy Research in New Delhi. "Stabilizing the northwest of the subcontinent, Afghanistan and Pakistan, is absolutely India's top foreign policy priority, because most of our threats come from there."

India's planned Afghan iron mine would help companies such as Jindal Steel & Power and Rashtriya Ispat Nigam by giving them shares in an estimated 1.8 billion tons of ore, for which global prices have more than doubled in the past three years. Afghanistan may see its geographic and economic isolation reduced as India follows China in promising money to build the country's first major railroads.

As Afghan anger over the shooting of 17 civilians by an American soldier last month increases calls for an accelerated U.S. exit, India is seeking to position itself as a rival to China in investment in Afghanistan and as an anti-Taliban force to help the government of President Hamid Karzai.

"The Indian and Chinese investments will contribute to Afghanistan's stability" as the U.S. withdraws its main combat forces between now and 2014, said Ali Jalali, a professor at the U.S. National Defense University in Washington and a former Afghan interior minister.

"They not only will bring jobs and infrastructure, but these two powerful governments will have a greater direct interest in seeing that all actors in Afghanistan behave moderately," Jalali said in New Delhi.