Afghanistan has invited Indian companies to develop its long-dormant mining sites during Industry and Commerce Minister Alhaj Nooruddin Azizi's five-day visit to India that concluded November 23, but Indian industry leaders are urging caution before committing to the resource-rich but challenging sector.

During a meeting with the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Afghan officials offered access to more than 1,400 mineral fields containing resources including copper, gold, lithium, iron ore, and gemstones. A joint Pentagon-US Geological Survey study estimated Afghanistan's untapped mineral wealth at around $1 trillion.

Incentives and investment push

Azizi announced Afghanistan would offer five-year tax exemptions to firms investing in new sectors, including gold mining, and impose only a 1 percent tariff on machinery imports.

"There is a huge potential available in Afghanistan. Even you will not find a lot of competitors," Azizi said at the ASSOCHAM session.

The minister emphasized that processing must occur within Afghanistan to generate local employment. He extended invitations to Indian businesses across mining, agriculture, healthcare, pharmaceuticals, and textiles, positioning the offer as part of Afghanistan's effort to diversify trade partnerships amid tensions with Pakistan that have disrupted border crossings.

ASSOCHAM Secretary General Manish Singhal responded cautiously, noting that "mining is a bit more difficult" because companies must conduct time-consuming geological surveys before any commitment. "They will be happy to offer those mines to Indian mining companies," Singhal said, but stressed the essential groundwork required.

Many Afghan gold mines remain idle due to infrastructure gaps, limited technical expertise, and past security concerns. The minister highlighted improvements in safety and mobility within Afghanistan during discussions.

Broader trade ties

Bilateral trade between India and Afghanistan currently stands at approximately $1 billion, with 70 percent comprising Indian imports of dried fruits, nuts, and medicinal herbs.

Singhal indicated India could significantly increase exports of rice, manufactured goods, and pharmaceuticals that Afghanistan currently purchases elsewhere.

Both nations agreed to appoint commercial attachés in each other's capitals and launch air cargo services between Delhi, Amritsar, and Kabul to facilitate trade. Afghanistan also requested Indian assistance in local value addition, including training for packaging saffron, nuts, and asafoetida.

Azizi met with External Affairs Minister S. Jaishankar and Commerce Minister Jitin Prasada during the visit, which marked the second ministerial-level engagement since the Taliban's 2021 takeover.