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India Sells Afghanistan As An Investment Destination

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India urged its vast private sector to invest in Afghanistan as a low tariff destination, saying that could help stabilise the country as Western nations begin to pull back troops after nearly 11 years of support.

Foreign Minister S.M. Krishna said on Thursday he recognised Indian businesses' concerns about Afghanistan, especially in the run-up to 2014 when most foreign troops will leave, but if companies invested together there would be security in numbers.

"We need to offer a narrative of opportunity to counter the anxiety of withdrawal, uncertainty, instability and foreign interference," Krishna told a conference hosted by India to encourage private investment in Afghanistan.

"Investments can provide that hope for employment, training and opportunity for the future. We encourage our industries to venture into Afghanistan in numbers together with Afghan partners," he said.

Krishna suggested there was opportunity in mineral-rich Afghanistan's location sandwiched between the energy resources of Central Asia, Iran and the Gulf on the one hand and the booming markets of China and India.

Prior to the ousting of the Taliban regime in 2001, India's arch rival Pakistan held almost exclusive rights to trade with Afghanistan.

Now, Islamabad is deeply concerned about India's expanding role in Afghanistan, seeing it as a move to encircle it.

China has also signalled a desire to tap into Afghanistan's mineral reserves.

Both China and India have made little headway since, held back by security concerns, as well as poor infrastructure and logistics in the landlocked mountainous country.

Violence in Afghanistan is at its worst in years, raising concerns that newly minted Afghan security forces may struggle to hold their own against a raging Taliban insurgency and that parts of the country may slip into civil war after the Western withdrawal.

India, which has invested billions of dollars in Afghanistan since the Taliban were ousted in 2001, is particularly concerned that the Islamist group's rise may further embolden anti-India militants who it says operate from Pakistan.

Krishna said India had eased customs duties for exports from Afghanistan as part of an initiative to promote trade with least developed nations in South Asia.

Indian companies could set up operations in Afghanistan and sell their produce back to India, using the lower tariffs.

"Let the grey suits of company executives take the place of olive green or desert brown fatigues of soldiers; and CEOs, the place of generals," he said.

A consortium led by state-firm Steel Authority of India last year won the rights to develop a huge iron ore deposit in central Afghanistan and a nearby 6 million tonne steel plant at a cost of around $11 billion.

China won a huge copper concession not far from Kabul, as well as oil blocks in the north.