Afghanistan is actively courting Indian industries with a series of incentives, including a five-year tax exemption for new domestic industries and reduced import duties, signaling a strong commitment to strengthening economic ties with India. This initiative aims to create a more attractive and "enabling" business environment to encourage Indian companies to invest across various sectors within Afghanistan.
Nooruddin Azizi, the Afghan commerce minister, announced these measures at a PHD Chamber of Commerce and Industry (PHDCCI) event in Delhi, emphasizing the country's focus on economic-oriented policies. These policies include increased government support for companies that increase production. The minister specifically highlighted cement, rice, textiles, pharmaceuticals, mining, and energy as priority sectors for investment.
In addition to tax breaks and low duties, Afghanistan is also seeking India's assistance in ensuring the Chabahar Port trade route remains functional and competitive. Minister Azizi pointed out logistical hurdles Afghanistan faces, such as border closures with Pakistan and frozen foreign reserves, and requested India's help in maintaining the Chabahar Port's operationality. He also mentioned that the Afghan government is open to negotiations with the U.S. to ensure the port's continued operation.
M Prakash Anand, Joint Secretary in the Ministry of External Affairs, mentioned that both countries have agreed to post trade attaches in their embassies to boost trade and revive the joint working groups on trade, commerce, and investment. Air corridors connecting Kabul to Delhi and Amritsar have also been activated, with cargo flights on these routes expected to begin soon.
The move to strengthen economic relations with India also comes amidst efforts to diversify Afghanistan's trade routes, particularly in light of recent tensions and border closures with Pakistan. The Chabahar port in Iran is seen as a vital alternative route for the landlocked country.
Earlier in October 2025, Afghanistan's Foreign Minister Amir Khan Muttaqi invited Indian investors to invest in key sectors such as mining and infrastructure. Muttaqi had emphasized the improved economic landscape in Afghanistan, noting the strengthening of the Afghan currency and increased property valuation. He also stated that bilateral trade between Afghanistan and India has reached $1 billion, with both sides exploring opportunities such as cargo plane air connectivity between Delhi, Kabul, and Amritsar to facilitate the export of fresh fruits from Afghanistan to India.
