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From the fourth floor of an office building in Gurgaon, a northern Indian city of tangled highways, yammering call centers and wandering livestock, Sanjay Gupta plays a bit part in the Great Game. His company, C&C Constructions, first ventured into Afghanistan in 2002. It started with a road from Kandahar to Spin Boldak, and then another one from Kandahar to Kabul. Over the past eight years, C&C has built more than 700 km of roads — worth about $250 million — and has subcontracted with USAID, the World Bank and the Asian Development Bank. "It's good to see a country getting built," Gupta says. "We also feel we contributed."

C&C's grandest project is the $125 million, bronze-domed Afghan parliament building. Funded by the Indian government and scheduled to be finished at the end of 2011, it will be the most prominent symbol of Indian efforts to help Afghanistan. But it may also be, at least for the time being, one of the last sizable manifestations of India's $1.3 billion aid program. After a series of attacks targeting India's presence in Afghanistan — including bombings of the Indian embassy in 2008 and 2009 — India is scaling back. Pakistan resents India's presence in its backyard, and Indian companies like C&C fear they can no longer guarantee the safety of their workers. "There are elements who don't want the Indian presence there," says Gupta. "Maybe it's time to wind up."

Or maybe it's just the beginning of a regional power struggle. With the U.S. looking for an exit, India is trying to figure out what its role in Afghanistan's uncertain future will be. U.S. counterinsurgency strategy aims to "clear, hold, build and transfer" a stable Afghanistan back to its people. The Indian government hopes to aid the "build and transfer" part of that effort by helping to develop Afghanistan's infrastructure and institutions.

Whatever New Delhi does, it can expect truculent opposition from archrival Pakistan, which has long tried to influence what happens in Afghanistan, primarily to ensure that the country's power players are friendly to Islamabad. Its suspicion of India's regional intentions is plainly revealed in several cables released by WikiLeaks. In a September 2009 missive, Anne Patterson, then the U.S. ambassador to Pakistan, wrote that a closer U.S.-India military relationship "feeds Pakistani establishment paranoia and pushes them closer to both Afghan and Kashmir-focused terrorist groups." In a cable describing a Feb. 16 meeting with U.S. Senator John Kerry, Pakistan's Prime Minister Yousuf Raza Gilani is quoted saying that to gain Pakistan's trust India would have to "decrease its footprint in Afghanistan." Pakistan's press routinely accuses India of sending in spies in the guise of doctors and engineers, and Islamabad claims that India's four consulates are bases for espionage and for funneling aid to separatist rebels in the Pakistani province of Baluchistan. Pervez Musharraf, a former Pakistani President, is convinced New Delhi is responsible for providing insurgents with weapons. "The Afghans have nothing," he told Time, "so it must be the Indians."

Softly, Softly
The Indians deny those claims and counter that their presence in Afghanistan is actually quite small. There are no Indian troops in the country, other than paramilitary guards at the embassy and consulates. The number of Indian nationals in Afghanistan is fairly modest too: around 3,000. They work for companies like C&C, for international aid agencies or directly for the Indian government. Indians have built a 400-km power-transmission line that carries electricity to Kabul. They have also established field clinics, a midday-meal program for 2 million schoolchildren and a children's hospital, the Indira Gandhi Institute of Child Health. To New Delhi, this is all part of a long and evolving relationship with Afghanistan — what Prime Minister Manmohan Singh calls "enduring civilizational links."

Both countries fought for independence from Britain (won in 1919 in Afghanistan's case, 1947 in India's), and both at first tried to develop their rural economies using socialist central planning. India supported the Soviet-backed regime of Mohammed Najibullah, giving asylum to his family, as well as to thousands of other Afghan refugees, after he was executed by the Taliban in 1996. India then backed the Northern Alliance of mujahedin against the Taliban. Even when the Taliban won, India let the Northern Alliance maintain the only Afghan diplomatic mission in New Delhi. That has not been forgotten. In a region where so many great powers have come and gone, India has credibility as a country that sticks around. Abdul Salam Rocketi, a former member of the Taliban and a 2009 presidential candidate, believes that India, like Pakistan as well as Iran, "wants to play in the Afghan sandbox," but in the process "won't try to destroy Afghanistan."

At the same time, many Afghans, even those who otherwise welcome Indian aid, fear that an overtly assertive India will lead to further instability and violence. Several Indian doctors were killed in February 2010 bombings at two guesthouses in Kabul that were widely attributed to insurgents working at the behest of Pakistan. And although India does not have troops in Afghanistan, Afghans worry that proposals for the Indian army to train local security forces would be a dangerous provocation to Pakistan. Islamabad, Rocketi says, "will see it as a threat and could react negatively." Musharraf, a retired general, echoes the sentiment of the Pakistani military. "India is trying to create an anti-Pakistan Afghanistan," he says. "Afghanistan is under the influence of India."

Staying Fluid
A potentially potent means of Indian influence is education. More than 1,000 Afghan students go to India every year on scholarships provided by the Indian government; this year, that program was expanded to include 300 postgraduate fellowships in agriculture. Writers and artists benefit from the India-Afghanistan Foundation, a cultural and academic exchange program that gives small grants. This and other educational programs help India cultivate ties with the elite of every Afghan ethnic group. With Afghan President Hamid Karzai's position increasingly tenuous, such initiatives help India shore up political alternatives to the Taliban.

India, however, must also decide how it will deal with the Taliban itself. It had no relations with the Taliban regime in the 1990s and still holds the Taliban responsible for a 1999 humiliation, in which Pakistan-backed jihadis hijacked an Indian airliner and, through Taliban mediation, successfully obtained the release of three prisoners held in India, including one of the alleged planners of the Sept. 11, 2001, attacks on the U.S. If the Taliban, which is widely believed to have ties to elements of Pakistan's security apparatus, returns to power, "Where does that leave Indian strategy?" asks Amitabh Mattoo, a director of the India-Afghanistan Foundation. "All this investment could vaporize quite fast."

One measure of India's urgent search for options is that it seeks dialogue with ethnic Pashtuns, the Taliban's base. "We don't have contact with [the Taliban], but without labeling them, we are ready to talk to anyone who is willing to talk to us," says a senior Indian official. Some analysts interpret this shift as opening the door to changing India's long-standing policy of refusing to deal with the Taliban. The London Conference in January 2010, in which the U.S. and NATO resolved to include the Taliban in any political solution, has partly forced India's hand. Says Suba Chandran, deputy director at the Institute of Peace and Conflict Studies in New Delhi: "If there is a future crisis involving Kabul, as happened 10 years ago after the hijacking of [the] Indian Airlines flight, New Delhi will be left stranded with no linkages within the government."

India has other reasons to be on good terms with whoever controls Afghanistan. The source of India's status as an emerging power is economic growth, for which it needs affordable energy. A stable, friendly Afghanistan would be a vital link between Central Asia's huge natural-gas reserves, through Iran, to Indian markets. India has already funded a 218-km road reaching from central Afghanistan to the Iranian border; it is now investing in improvements to the Iranian port at Chabahar. (C&C is already using Iran's Chabahar and Bandar Abbas ports to transport its heavy equipment to Afghanistan.) "Trade, transit and energy" are as important to India as security, says Gautam Mukhopadhaya, India's ambassador to Afghanistan.

As India tries a lighter touch in Afghanistan, it may extend a heavier hand elsewhere. "Looking at the American military cooperation with India," said South Asia expert Stephen P. Cohen in a recent Brookings Institution speech, "we see the most fruitful arena to be at sea." India plans to commission its first nuclear submarine, the I.N.S. Arihant, or "Destroyer of Enemies," sometime next year, and the U.S. is keen to sell India some of its military technology, not least to forestall China's growing might.

In other words, India may have the option of lowering its profile in Afghanistan for the chance to dominate, with U.S. backing, the Indian Ocean. China has already made its move, funding the expansion of the Pakistani port of Gwadar into a deep-sea facility and naval base, and of a new port at Hambantota in Sri Lanka, a country that has traditionally been much closer to India. Kanti Bajpai, a professor of international politics at Jawaharlal Nehru University, puts it this way: "Wherever the Great Game is, you can't afford to not be a player."

— with reporting by Aryn Baker / Kabul And Madhur Singh / Mumbai

• Jyoti Thottam / Gurgaon
• Attacks on its interests have forced India to tread more lightly in its dealings with Kabul, but it is still seeking ways to protect and extend its influence