Q+A - What business risks do Maoist rebels pose?

NEW DELHI Wed Mar 24, 2010 3:46pm IST

Police and railway officials stand next to an overturned coach of a passenger train which was derailed after suspected Maoist rebels blew up a railway track near Manoharpur, in  Jharkhand November 20, 2009.  REUTERS/Rajesh Kumar Sen/Files

Police and railway officials stand next to an overturned coach of a passenger train which was derailed after suspected Maoist rebels blew up a railway track near Manoharpur, in Jharkhand November 20, 2009.

Credit: Reuters/Rajesh Kumar Sen/Files

Related Topics

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

NEW DELHI (Reuters) - Maoist rebels have stepped up attacks in parts of India this week in response to a planned government offensive, a conflict that could hurt investment plans, particularly in the country's mineral belt. Prime Minister Manmohan Singh has described the insurgency as the biggest internal security challenge. Here are some questions and answers on the insurgency and possible risks to industry and investment.


The rebel movement started as a peasant revolt in Naxalbari village in West Bengal in 1967. It was initially crushed by the government, but the rebels regrouped in the 1980s. They say they are fighting for the rights of the poor and the disenfranchised.

They now number an estimated 22,000 combatants in more than 180 of the country's 630 districts. They operate across a "red corridor" stretching from the Nepal border to West Bengal and through central India into the southern state of Andhra Pradesh.

The rebels are armed with automatic rifles, shoulder-fired rockets, explosives and mines.

Indian officials say the movement is now spreading to cities and bigger towns where the rebels enjoy support from some educated youth and intellectuals.


While the economic impact may be small compared with India's trillion dollar economy, the insurgency and the sense that it is worsening signals that India does not fully control its own territory and adds to risks for companies considering investments.

The Maoists regularly attack railway lines and factories, aiming to cripple economic activity. With the rebels controlling vast swathes of mineral-rich areas, the government has often struggled to transport coal to power and steel companies.


The effect of the Maoist insurgency has already taken its toll on business. Work on a $7-billion steel plant by India's third largest steel producer, JSW Steel Ltd, has been delayed.

Frequent rebel strikes have hit production and shipment at firms such as India's largest miner of iron ore, NMDC Ltd's and state-run National Aluminium Co Ltd.

Rebels sided with farmers during violent protests against government moves to acquire farmland for industry, forcing the scrapping of a Tata Motors' Nano car plant and a $3 billion chemicals hub complex in eastern India. Protests by farmers have also delayed work on two separate plants by the world's leading steelmakers Arcelor Mittal and POSCO in Orissa.


The government has deployed hundreds of state and central police in the country's east to halt the Maoists' advance, but so far has refused to send in the army. The government says it could take up to five years to defeat the Maoists.

(Writing by Krittivas Mukherjee)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared


Paucity of Rains

Patchy Rain

Met office rules out surplus monsoon in 2014   Full Article 

Boat Tragedy

Boat Tragedy

Boy and girl on Korean ferry tied life jackets together before they drowned.  Full Article 

Ukraine Crisis

Ukraine Crisis

Ukraine forces kill up to five rebels, Russia starts drill near border.  Full Article 

Big Buyback

Big Buyback

Apple expands buybacks by $30 billion.  Full Article 

Put A Ring On It

Put A Ring On It

Actress Jodie Foster marries girlfriend Alexandra Hedison.  Full Article 

Times Top List

Time 100

Janet Yellen, Miley Cyrus odd bedfellows in Time's list of 100 most influential.  Full Article 

Champions League

Champions League

Benzema strike gives Real Madrid edge over holders Bayern Munich.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage