• The JSBF Report

TALIBAN 2.0 IN AFGHANISTAN: IMPLICATIONS ON INDIA AND ITS ECONOMY

Updated: Oct 11

By- Shreya Malhotra


source- news laundry

“The situation in Afghanistan is of direct concern to India, since we have an abiding interest in the stability and prosperity of that country and since we are directly impacted by developments in that region. India does not see assistance in Afghanistan’s reconstruction as being a zero-sum game. Our assistance programme in Afghanistan has earned us goodwill among the ordinary people there…,” said the then External Affairs Minister, SM Krishna in February 2010 to the Rajya Sabha. (Jayaswal, 2021)


Eleven years later, despite the India-Afghanistan Strategic Partnership Agreement, where India promised to help Afghanistan in building its infrastructure, organization, education, and technology (Indianews, 2021), India’s equation with Afghanistan has gone for a toss. Soon after the US forces left the country by August 31st,2021, Afghanistan saw its worst fear come true, Taliban 2.0 with much renewed force. The regional stability of the country is again in question.



The consequences are immense for India, the future of huge investments made, as well as the ongoing projects in the region, are uncertain. India is yet to ascertain the situation, for any retaliation. Priority is to get Indian citizens safely back. It has closed its consulates and brought back the embassy employees along with a major chunk of Indians residing there.


US troops’ departure from Afghanistan in addition to India closing all its consulates, has deprived India of ISR capabilities (Intelligence, Surveillance and Reconnaissance), which has raised concerns for the Indian Government. As also India’s two neighboring countries, Pakistan and China have recognized the Taliban as a legitimate government, India is now in a dilemma about its investments in the region as well as violence relating to India Administered Kashmir (Deshmukh, 2021). India’s initial focus should be to guard its borders, with these hostile countries, which are sensitive as it is. With China and Pakistan funding the Taliban, it is a matter of time that terrorism will be back in Kashmir with renewed force. According to ‘The Hindu,’ f,’ the first time in the last decade, India administered Kashmir now has more foreign militants (50) than local militants (11). Indian Government will not just have to deploy more troops along the borders shared between these countries, it also will have to invest much more in strategic planning to keep the country safe. This is going to require a lot more investments to this end. The government will have to channel funds accordingly, from less crucial tasks to the more critical ones.


India’s 3 billion investment in the conflict driven region is now a cause for worry since the construction and development which had been going on since 2011 has come to a standstill. Since Afghanistan is still a neighboring country and will affect India in more than one way, India can keep the approach of ‘Wait and Watch’, a little longer. Once the government deciphers the true intentions of Taliban, it can decide to whether to become allies and start a healthy relationship or to discard the idea. Once allies, the construction and development will be back on track and would bring back regional stability. India should keep this as an option to get the full worth of its investments already made. If India shares a good relationship with the Taliban, the next step would be to initiate dialogue for further investments, as Afghanistan is in dire need for development in every sector and its monetary aid has been frozen from IMF. Pakistan being bankrupt itself can offer no consolation to Taliban on financial front.


According to World Bank, Afghanistan’s GDP in 2020 was a little more than 19 billion US dollars and it's imports from India in that year were 826 million US dollars. This shows the dependence of Afghanistan on India, for almost 5% of its imports. Since this trade has ceased after the Taliban takeover, its GDP will suffer quite a bit. Reuters has predicted that Afghanistan’s GDP will fall by 20% after the takeover (Singh, 2021). As for India, which had a GDP of 2708 billion US dollars in 2020, the cessation of these exports on its revenue is miniscule. Even though ceasing trade between the two countries will not affect India as much, still the government should continue to find new ways to protect its 3 billion assets in the form of investments. India should also continue to help since it has developed an emotional connect with the people of Afghanistan, mostly the vulnerable Afghani population, who are against the takeover by Taliban, and the new government which is formed by force. Since Women’s Rights are also in question due to the Sharia law, India should push for social reforms. It should help develop sectors such as education and medicine with minimum investments that are much desired in the region. This will further develop positive sentiments amongst the two countries.


China’s prime interest in Afghanistan is for its natural resources. It wants its geo-political presence to be felt, as US is out of the picture, by using Afghanistan’s political instability to its advantage. Unfortunately, India does not have any allies who can bargain with Taliban on her behalf.


Thus, the best alternate with India, will be to avoid strained relations with the new Afghan government and use its diplomatic channels till the situation improves. If India later chooses to better its relationship with Taliban, it will hence, prevent the fear of increased terrorism in India. As of now, India can only fight for Human Rights in the disputed region, till it is on its ‘Wait and Watch’ mode. It must also investigate ways to protect its borders. Rest depends on how Taliban behaves, for India to weigh its options.


Shreya Malhotra is a second year B.Com(Hons.) student at JSBF.


References


1)https://www.hindustantimes.com/analysis/the-uncertain-future-of-india-s-economic-relationship-with-afghanistan-101630328083601.html

2)https://www.newsncr.com/national/afghanistan-taliban-crisis-how-many-billion-rupees-of-india-are-stuck-in-afghanistan-here-is-the-full-account/

3)https://economictimes.indiatimes.com/news/defence/the-return-of-the-taliban-and-complications-for-india/articleshow/85419928.cms?from=mdr

4)https://www.reuters.com/world/asia-pacific/afghanistan-gdp-may-slump-20-after-taliban-takeover-fitch-solutions-2021-08-20/

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