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India and Afghanistan could sign a pact this week for the construction of the Shahtoot dam, which aims to provide safe drinking water to 2 million people in Kabul and supplement irrigation facilities in Afghanistan, two people familiar with the development said.

The foreign ministers of the two countries are likely to sign the agreement for the almost $300-million project at a virtual meeting between Prime Minister Narendra Modi and Afghan President Ashraf Ghani, one of the people mentioned above said. The virtual meeting could happen on Tuesday or Wednesday, the person said.

The dam is expected to be built on the Maidan river tributary of Kabul river. The dam project has been in the works for several years even as Pakistan has expressed concern that it would reduce water flow into the country.

When built, the Shahtoot dam is expected to have a storage capacity of 147 million cubic metres of water. It is designed to meet the drinking water requirements of roughly 2 million of Kabul’s approximately 6 million residents and irrigate about 400 hectares of agricultural land in Chahar Asiab and Khairabad districts in Kabul province, according to news reports.

At the 2020 Afghanistan Conference, foreign minister S. Jaishankar had made it clear that India will construct the dam. He had also announced more than 100 projects worth $80 million that India would undertake in Afghanistan.

The projects underscore India’s support to the Afghan government headed by Ghani and its people, besides underlining New Delhi’s intentions to remain involved in development work despite the possibility of the Taliban returning to Kabul following a power-sharing arrangement.

India has been wary of the Taliban, in view of the group’s proximity to Pakistan and its military spy agency the Inter-Services Intelligence (ISI).

Ghani’s government is engaged in peace talks with the rebel group after the US struck a deal with the group last February to facilitate the withdrawal of US-led foreign troops after almost two decades.

India has completed a large number of infrastructure projects in Afghanistan, including the construction of a 218-km road from Delaram to Zaranj along the Iranian border to provide alternative connectivity for Afghanistan through Iran, the Salma dam and the Afghan parliament building, which was inaugurated in 2015.

Since 2001, after the US-led war on terrorism ousted the Taliban regime from Kabul, India has pledged and implemented development and reconstruction projects worth more than $3 billion, according to the Indian foreign ministry.

So far, India has undertaken “400 plus projects" in all 34 provinces of Afghanistan, according to officials.

To improve trade and connectivity with Afghanistan, India has been trying to develop the Chabahar port in Iran and also launched an air freight corridor between several Indian and Afghan cities.

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