External Affairs Minister Pranab Mukherjee's two-day visit to Afghanistan last week will give added momentum to India Afghanistan ties, which New Delhi has been working hard to develop since the overthrow of the Taliban in 2001.
The growing significance of Afghanistan in India's strategic calculus was underlined during Prime Minister Manmohan Singh's landmark visit to Kabul in August 2005.
Mukherjee, who has been visiting every neighbouring country after taking over as External Affairs Minister, also used his visit to invite Afghan President Hamid Karzai for the 14th SAARC summit scheduled to be held in New Delhi in April.
The summit is expected to welcome Afghanistan as the eighth SAARC member.
India is the largest donor among the regional countries to Afghanistan, and the additional $ 100 million it has pledged now will help speed up reconstruction and development programmes.
This includes supporting development projects like schools, hospitals and roads, training civil servants and launching an online registry for Indians at the Indian embassy in Kabul.
New Delhi is already helping Kabul in a number of fields like health, education and infrastructure, and to build a new Parliament, which Afghan Foreign Minister Rangeen Dadfar Spanta recently described as a "symbol of India's commitment to human rights and democracy in Afghanistan".
Indeed, from India's point of view, strengthening democratic institutions in Afghanistan is mutually beneficial as such a system could check the re-emergence of the Taliban.
There are over 3,000 Indians in Afghanistan and their security is a major concern for New Delhi.
Elements of the Taliban are evidently active along the 2,500 km border that Afghanistan shares with Pakistan, which includes Kandahar, Paktika, Khost and Nuristan, and since Indians are involved in reconstruction projects in most of these areas, they are vulnerable to attacks.
A tricky issue in Indo-Afghan ties is obviously the Pakistan factor that stands in the way of redefining regional security and economic equations.
The denial of transit facility for Indian goods bound for Afghanistan by Pakistan is an example. India should actively pursue President Karzai's proposal to Indian entrepreneurs for opening production facilities in Afghanistan.
This would not only enhance bilateral trade and open the way for Indian products to the large Central Asian markets, but would also generate jobs for unemployed Afghans.