Q+A-How big is the Maoist threat in India?

By Krittivas Mukherjee and Bappa Majumdar

NEW DELHI, May 28 (BestGrowthStock) – Suspected Maoist rebels
sabotaged a high-speed train in eastern India on Friday,
killing at least 65 people when the crowded train derailed and
smashed into the path of a goods train, officials said.
[ID:nSGE64Q0F8]

Maoists rebels have in recent months stepped up attacks in
response to a government security offensive to clear them out
of their jungle bases.

Here are some questions and answers about the Maoists and
their threat in India:

WHO ARE THE MAOISTS?

The Maoist want to overthrow the Indian state through armed
struggle. Indian officials say the rebels have plans to
overthrow the government by 2050.

They started their an armed struggle in 1967 with a peasant
revolt in Naxalbari village in West Bengal state but were
initially crushed.

After regrouping in the 1980s, they began recruiting
hundreds of poor villagers, arming them with bows and arrows
and even rifles snatched from police and government armouries.

The rebels now buy weapons from Chinese smugglers and are
in touch with other militant groups operating in India,
including groups in Kashmir and the northeast, says the
government. They are equipped with automatic weapons, shoulder
rocket launchers, mines and explosives.

Indian authorities say they are led by Koteshwar Rao, alias
Kishanji, who is in charge of militant activities, and
Ganapati, the political leader.

HOW BIG IS THE MOVEMENT?

The rebels have an estimated 20,000 combatants, including
6,000-8,000 hardcore fighters.

Maoist rebels have made inroads in nearly a third of the
country’s 630 districts, according to the government.

They operate across a “red corridor” stretching from the
southern state of Andhra Pradesh to the central state of
Chhattisgarh and into West Bengal, bordering Nepal and Bhutan.

They remain hidden in dense forest bases and move around
villages in remote areas.

HOW BIG A THREAT ARE THEY TO INDIA’S STABILITY?

Prime Minister Manmohan Singh has described the insurgency
as the biggest internal security challenge since independence.
More than 1,000 attacks were recorded in 2009 and 600 people
were killed. The Maoists regularly attack railway lines and
factories, aiming to cripple economic activity.

HOW BIG IS THE RISK TO INVESTORS?

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 territory and adds to risks for companies considering
investments.

With the rebels controlling vast swathes of mineral-rich
areas, the government has often struggled to transport coal to
power and steel firms. The rebels extort about $300 million
from companies in India every year to fund their movement,
police and officials say.

WHAT COMPANIES HAVE BEEN IMPACTED?

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 (JSTL.BO: ), 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 (NMDC.BO: ) and state-run National Aluminium Co Ltd
(NALU.BO: ).

Rebels sided with farmers during violent protests against
government moves to acquire farmland for industry, forcing the
scrapping of a Tata Motors’ (TAMO.BO: ) 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 (ISPA.AS: ) and POSCO
(005490.KS: ) in eastern India.

Stock Today

(Editing by Michael Perry)

Q+A-How big is the Maoist threat in India?