India the largest regional provider of humanitarian and reconstruction aid to Afghanistan is roposing what may become Afghanistan’s biggest foreign investment: $11 billion to build an iron mine, steel mill and railroad. India has already played a vital role in the reconstruction of Afghanistan in the past one decade after the fall of the Taliban regime, having spent $1.5 billion on Afghan roads, power lines, schools and the parliament
Raja Mohan, a senior fellow at the independent Center for Policy Research in New Delhi quoted by the Tampa Bay Times said, “India is showing its commitment to an unprecedented ambition and role in Afghanistan.”
Mr. Mohan further added, “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.
Ali Jalali, a professor at the U.S. National Defense University in Washington and a former Afghan interior minister said, “The Indian and Chinese investments will contribute to Afghanistan’s stability” as the U.S. withdraws its main combat forces between now and 2014.
“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.