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War-torn Afghanistan beckons India Inc

Fakir Chand in Bangalore

Multi-billion dollar business opportunities await Indian Inc in the war-ravaged Afghanistan, which is embarking on a long haul of recovery and reconstruction from the ruins of the ousted Taliban regime.

The Indian industry, especially in the core sectors of the economy, can not only make best of the unfolding scenario in Afghanistan to kick-start its own revival back home, but also compete with global players, who will be pitching in for the massive infrastructure projects on anvil.

Even as the political situation continues to be fluid, India's special envoy for Afghanistan S K Lambah told hundreds of delegates at the eighth CII partnership summit in Bangalore on Monday that the World Bank and other multilateral agencies would be deciding the modus operandi of granting around $9-billion financial assistance to the interim government at their meeting in Tokyo on January 20-21, 2002.

"During the next five years, the war-torn Afghanistan will be requiring around $2-billion credit per annum to rebuild its economy. With the Indian government already announcing a $100 million (around Rs 5 billion) line of credit for the current fiscal, Indian Inc should be able to capitalise on the immense opportunities opening up there," Lambah stated at the second plenary session of the summit on Afghanistan: The Challenges of Reconstruction.

The core areas of reconstruction and rebuilding of the Afghanistan economy are power, roads, transportation, telecommunications, housing, healthcare, education, agriculture, and the financial sector.

While there will be no dearth of competitors in the fray for the same pie of the cake, Lambah said the Indian companies should cash in on the first-move advantage the Indian government would provide with the opening up of the Indian embassy in Kabul and consulates in the major cities of Afghanistan.

"Even the CII has agreed to open a trade office in Kabul soon to provide logistical support to Indian companies, exploring the business prospects. Besides with the appointment of India's ambassador to Afghanistan later this month, there will be a full-fledged commercial section in the Indian embassy at Kabul to deal with the Afghan regime."

As the reconstruction and rebuilding of the Afghanistan calls for massive mobilisation of human and financial resources, Lambah said a mere $100-million line of credit from the Indian government would hardly be sufficient to begin with.

"The Export-Import Bank is also working out modalities to provide credit for Indian companies taking up reconstruction projects in Afghanistan. A decision is likely next week once the bank discusses the matter with the government and industry representatives," Lambah told rediff.com later on the sidelines of the plenary session.

Asked whether the government would stand guarantee for the security of Indian companies and safety of their employees as stability and rule of law were yet to materialise in the war-torn country, Lambah said the interim government of Hamid Karzai had assured all-out protection to the Indians working in that country.

"They have assured of not allowing the mistakes of the past to repeat again. Since the interim government has staked everything for the future of the country, congenial environment was being created for sustained development and growth of the Afghan economy."

Lambah, however, could not give even rough estimates of the business potential awaiting India Inc in Afghanistan.

"It is too early to project figures. Surveys and various studies are being conducted by multilateral agencies to get as much data and information as possible. By the time a permanent regime takes over in Kabul, the Indian government would be in a position to guide the industry about the course that should be taken.

Besides, opportunities for rebuilding the strife-torn country, the scope for Indian exports is immense, especially in farm and food-processing goods.

While the Indian industry can pitch in for massive infrastructure projects either directly or in joint venture with other overseas' companies, Indian trade and business community can make best use of geographical proximity to Afghanistan for stepping up exports.

Financial sector and information technology will be the other two key areas of opportunities for the Indian service industry to take advantage of as Afghanistan is virtually devoid of any expertise in these fields.
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