Regional rivalry tests security in Mumbai

Bollywood actor Shah Rukh Khan speaks to the media in Mumbai in this April 8, 2008 file photo. A verbal battle between Khan and the Shiv Sena has sparked worries the stature of Mumbai is being undermined by politics that are anti-migrant and polarising.

MUMBAI (Reuters) - A verbal battle between Bollywood star Shah Rukh Khan and radical Hindu group Shiv Sena has sparked worries the stature of Mumbai, India's financial hub, is being undermined by politics that are anti-migrant and polarising.

The Shiv Sena, which runs the Mumbai municipality, triggered a debate that has resonated across India over the last week after it criticised Khan for calling for Pakistani players to be included in India's IPL cricket league.

Shiv Sena members have torn up posters in Mumbai and warned theatres against screening Khan's new movie "My Name Is Khan", touted as a blockbuster and due for release on Feb. 12.

It was the latest in a series of incidents, as Shiv Sena promises to protect Mumbai's indigenous Marathi community in industries from construction to taxis from thousands of poor migrants who flock to the city each year.

The uproar came at a time when Mumbai could lead India as a beacon for global investment, as Asia's third-largest economy pulls away from the financial crisis at a much quicker pace than its peers in Europe and the United States.

"Mumbai's image may suffer from it," wrote the Economic Times newspaper.

"Sustained political disturbances in India's financial hub may not go well in the minds of international investors who are betting high on India, thanks to its high growth projection vis-a-vis flat returns from most developed countries."

"Also, Mumbai is betting on creating an international financial centre, giving competition to Singapore and Dubai."

The skirmish comes as local politics have also overshadowed other major cities in India.

There has been unrest in southern Andhra Pradesh, where supporters for the creation of a Telangana state have repeatedly shut down the IT hub of Hyderabad, home to the Indian operations of multinationals including Microsoft and Amazon.

"Maharashtra politics has become an ominous combination of crony capitalism and nativism," wrote Pratap Bhanu Mehta, president of the Centre for Policy Research, in the Indian Express daily.

"Maharashtra is important not because the (Shiv Sena) can break India. They cannot. But it is important because its politics can be one possible future for India, an India where liberal values are in jeopardy," he wrote.

NO APOLOGIES

Khan, who is a co-producer of "My Name Is Khan", has said he will not apologise, and has quickly won support amongst the film fraternity in Mumbai, home to Bollywood.

Shiv Sena founder Bal Thackeray has also trained his guns on cricketer Sachin Tendulkar, Congress party poster boy Rahul Gandhi and industrialist Mukesh Ambani, one of the world's richest men, who said Mumbai belonged to all Indians.

Thackeray wrote in the party newspaper: "I would like to tell all businessmen that only Marathi people have the first right over Mumbai."

The Shiv Sena has been partly prompted by efforts to outdo rival Maharashtra Navnirman Sena (MNS), which also draws strength from nativist sentiment and is run by Thackeray's estranged nephew.

Last year, thousands of north Indians fled the city and the state after MNS workers attacked migrants, triggering a backlash in northern states where trains headed for Mumbai were attacked.

(Additional reporting by Shilpa Jamkhandikar and Matthias Williams; Editing by Alistair Scrutton and Jerry Norton)