Indian companies look to foreign allies for Afghan reconstruction

KP Sethunath

Bangalore, Jan 7: Even as corporate India is gearing itself up to tap the huge opportunities that will come up in the reconstruction of Afghanistan, top industry sources indicated that Indian companies will be looking at de-risking themselves from political and external vagaries that could arise in the war-ravaged country.

One strategy would be to pursue strategic alliances with foriegn firms and multi-lateral funding agencies while pitching to tap the business and development oppurtunities emerging in Afghanistan. In the current planned reconstruction prgramme, the Asian Development Bank will largely focus on funding infrastructure projects, while the World Bank will look at social development issues like healthcare and the United Nations will focus on helping Afghanistan in the new governance issues. It is in this background that Indian corporates will now look at tappping the Afghan opportunities.

This is a marked departure from the initial euphoria that was generated over the business possibilities in Afghanistan reconstruction following the rout of the Taliban regime. At least 100 Indian companies have evinced initial interest in doing business with the country. These include ABB India Ltd, ACC, Tata group, Hindustan Construction Company, Larsen & Toubro, Bhel and Hudco.

Meanwhile, Mr SK Lambah, India’s special envoy to Afghanistan, while addresing the CII-Partnership Summit here, outlined the oppurtunities and risks in doing business with Afghanistan. Mr Lambah provided a 10-point approach for the Indian industry and business in dealing with Afghansitan. The first should be an on the sport review of the ground realities by the Indian industry to be followed by the opening up of the representative offices of the industry chambers.

Tie-up with foreign companies to tap external aid, networking with NGOs, particiaption in World Bank and UNDP tenders, focuss on small and medium industrties are other steps suggested by Mr Lambah. On the initiatives from the government, Mr Lambah said the Indian embassy in Kabul will soon have a full-fledged commerical section while Exim Bank has evinced interest in establishing business with the Afghanistan. A meeting with Exim Bank will be held by the middle of Feburuary.

Mr Lambah said a two-day summit on the inititaive of World Bank in Tokyo in January 21 and 22 would consider a $9-billion package in the next five year for reconstruction of the country. Mr Lambah said main areas of business oppurtunities in Afghanistan will be in areas such as transport infrastructre, power, housing, tele-commuinication, health, education etc.

The main risk factors in doing business with Afghanistan inlcuded the lack of a direct land route, administrative instability and the absence of any credible financial system.