VZCZCXRO9384
PP RUEHBI RUEHCI RUEHCN
DE RUEHCI #0386/01 3601122
ZNR UUUUU ZZH
P 261122Z DEC 07
FM AMCONSUL KOLKATA
TO RUEHC/SECSTATE WASHDC PRIORITY 1807
INFO RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1705
RUEHCG/AMCONSUL CHENNAI PRIORITY 0778
RUEHBI/AMCONSUL MUMBAI PRIORITY 0783
RUEHKA/AMEMBASSY DHAKA 0517
RUEHKT/AMEMBASSY KATHMANDU 0516
RUEHGO/AMEMBASSY RANGOON 0372
RUEHIL/AMEMBASSY ISLAMABAD 0419
RUEHCN/AMCONSUL CHENGDU 0124
RUEILB/NCTC WASHINGTON DC
RUEIDN/DNI WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHMFIUU/CDR USPACOM HONOLULU HI
RUEHCI/AMCONSUL KOLKATA 2209

UNCLAS SECTION 01 OF 03 KOLKATA 000386 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PTER PHUM EIND ECON EINV ASEC IN
SUBJECT: MAOIST INSURGENTS IN EASTERN INDIA EXPAND INFLUENCE WITH 
RURAL OPPOSITION TO INDUSTRIAL PROJECTS 
 
REF: A)  KOLKATA 0144    B)  KOLKATA 345 
 
¶1.  (SBU) Summary:  Development projects in rural India 
including India's Special Economic Zones (SEZs) have provided 
the country's Maoist insurgents (or Naxalites) with an 
opportunity to solidify their base and to increase their reach 
into more semi-rural areas.  In the extensive "red corridor" of 
Orissa, Bihar, Chhattisgarh, Jharkhand and parts of West Bengal 
the Maoists seek to project themselves as defenders of the poor 
village and tribal populations against business and government 
efforts to acquire land for industry.  The Maoists receive 
support through levies and additional cadres from small land 
holders in exchange for protection from the government and 
capitalist "land grabbers."  The failure of the national and 
state governments to effectively address the Maoist threat, as 
noted by Prime Minister Singh in a December 20 conference, means 
that the Maoists will continue to expand their influence into 
areas closer to eastern India's urban centers.  End Summary. 
 
¶2.  (SBU) The Communist Party of India-Maoist (Maoists) was 
established in September 2004 following the merger of the 
Peoples' War and the Maoists Communist Center of India.  Since 
the consolidation of the two groups, the Maoist insurgency has 
been growing in India's Eastern hinterland (ref. A).  On 
December 20, Prime Minister Manmohan Singh speaking to a 
gathering of Chief Ministers, conceded that Maoist activity has 
expanded and said, "Although the notions of a red corridor from 
Nepal to Andhra Pradesh are exaggerated, we have to admit that 
they have achieved some degree of success in enlarging their 
areas of militancy.  In some states, they have also become 
involved in local struggles relating to land and other rights." 
In the various states, the Maoists maintain a common focus and 
ideology of violent struggle against corrupt local, state and 
national governments unable or unwilling to address the basic 
needs of India's rural population.  The Maoists (or Naxalites) 
are a banned political party in most Indian states (except West 
Bengal) and remain outside of the electoral process.  Unlike 
their Nepali counterparts, India's Maoists have shown no 
interest in entering the political mainstream and Maoist 
sympathizer and Andhra Pradesh-based writer P. Varavara Rao 
commented that joining electoral politics would mean "drifting 
away from the ideology" of Mao Zedong. 
 
--------------------------------------------- --------- 
India's Rural Development Projects create displacement 
--------------------------------------------- --------- 
 
¶3.  (SBU) The creation and approval of 172 Special Economic 
Zones (SEZs) and the designation of other rural land for 
industrial development has threatened to displace tribal and 
rural populations in Orissa, Jharkhand, Bihar, Chhattisgarh and 
West Bengal.  As agricultural land is identified for industrial 
development, some of the locals have turned to the Maoists for 
support in retaining their land.  Maoists are reportedly arming 
and assisting small landowners and the tribal population in 
these areas and using the popular discontent to expand their 
insurgency into new territory.  Maoist propaganda capitalizes on 
and exacerbates the scope of rural disaffection.  Violence has 
already affected the USD 12 billion South Korean Pohang Iron and 
Steel Company (POSCO) project in Orissa as local villagers 
oppose losing land to the proposed large steel and port 
facility. 
 
¶4.  (SBU) The Maoists maintain that tribal and rural populations 
have nothing to gain from globalization.  Local groups readily 
accept the Maoist message as the GOI has failed to effectively 
address the economic backwardness of the rural population. 
Rural Indians in the Maoist-dominated red corridor are no longer 
receptive to industrial development as one of the consequences 
of "progress."  In many instances, the state government has not 
provided appropriate compensation to displaced villagers and 
tribals.  A senior police official from Bihar noted that, "The 
issue of SEZs has given the Maoists a great opportunity to win 
over the sympathy of the villagers." 
 
¶5.  (SBU) The Maoist-orchestrated November 19 general strike in 
response to anti-industry violence in West Bengal's Nandigram, 
just 70 kilometers from Kolkata, (ref. B) showed that the 
Maoists are now seeking to expand their operations into 
semi-rural India.  One source claimed that the Maoists were able 
 
KOLKATA 00000386  002 OF 003 
 
 
to recruit at least 200 cadres following the Nandigram violence. 
 During the strike in West Bengal, the Maoists also blew up a 
portion of a rail track in Birbhum district and disrupted train 
services.  Senior police officials from Bihar and Jharkhand 
confirmed that Maoists have entered areas where major Indian 
companies such as Reliance, Tata and Bharti, have started 
projects. 
 
--------------------- 
The National Response 
--------------------- 
 
¶6. (U) During the October 3-5 Directors General of Police 
conference held in New Delhi, a report was presented which noted 
a large-scale Maoist penetration in all rural areas that were 
slated for "development."  The report noted GOI security 
establishment's fears that Maoist sympathizers in semi-rural 
areas provide support and can increase the Maoists capacity to 
conduct operations closer to the country's urban centers.  In 
2006, Prime Minister Singh called the Maoists "the single 
greatest threat to Indian national security" and was reportedly 
"completely dissatisfied" with the home ministry's handling of 
the issue. 
 
----------------------------------- 
The POSCO project and Maoist impact 
----------------------------------- 
 
¶7.  (SBU) Sources from Orissa reported that there is some 
evidence that the Maoists have penetrated the villages in the 
area of the major POSCO development project complex in 
Jagatsinghpur district.  POSCO requires 4,000 acres but has only 
managed to acquire one-third of the land (1,135 acres) as some 
village groups have put up barricades and refused to vacate 
their land.  Villagers have formed the POSCO Pratirodh Sangram 
Samiti (Committee for Defense and Struggle against POSCO), 
reportedly with the help of the Maoists to oppose the 
establishment of the plant. 
 
¶8. (SBU) Maoist-backed violence has already spread to Orissa's 
nearby Jajpur district where hundreds of tribal villagers 
demolished a partly constructed boundary wall of the proposed 
Tata Steel industrial complex.  Orissa Home Secretary Tarunkanti 
Mishra assured investors that the police would keep a close 
watch over Maoist activities in the region.  POSCO is also 
planning to hire a large private security company to protect its 
property.  POSCO representative Gee Wong Sung emphasized that 
the company remained committed to the project and plans to start 
construction on the plant by April 2008. 
 
------------------------------------------ 
The Maoist Threat Moves Across State Lines 
------------------------------------------ 
 
¶9.  (SBU) POSCO representative Sung remained confident of the 
POSCO overall plans in Orissa but noted his concern with POSCO's 
mining project close to the Orissa-Chhattisgarh border.  The 
Dantewada district of Chhattisgarh remains a Maoist stronghold. 
On December 16, 299 prisoners (an estimated 105 Maoists amongst 
them) escaped from Dantewada prison, after overpowering the 
prison staff.  The escaping prisoners also stole some rifles. 
The Government of Chhattisgarh (GOCH) suspended the senior 
police officer in charge of prison security in the state for 
negligence.  (One GOCH contact told AmCons Mumbai, that only 
three guards were on duty when the jail-break occurred.) (Note: 
Chhattisgarh is also home to the Salwa Judum Movement -- akin to 
a village-level, self-defense militia -- which the GOI has 
touted as a successful counterweight to the Maoist threat. 
However, during the recent visit of a Mumbai ConOff to 
Chhattisgarh, local journalists and NGOs discussed how the 
movement was now in tatters as the members have grown 
disillusioned watching fellow members settle grudges instead of 
fighting the Maoists.  End Note.) 
 
 
¶10.  Comment: (SBU) Although the GOI touts SEZs and other rural 
development projects as vehicles for progress in the country's 
hinterland, the Maoists continue to strengthen and to expand 
their base in poor rural areas.  The Maoists strategy of 
 
KOLKATA 00000386  003 OF 003 
 
 
expanding from rural bases and isolating urban centers was used 
effectively in Nepal.  Recent developments indicate that the 
Maoists are following this model in India as well.  It is ironic 
that the policies ostensibly designed to include rural India in 
the country's progress are the same policies that push these 
communities into Maoist camp, as the central and state 
governments still fail to adequately address the issue of land 
reform, compensation and fail to provide basic services to the 
rural poor and tribal groups.  Prime Minister Manmohan Singh 
described the Maoists as India's single largest threat to 
internal security but no effective measures have been taken to 
combat the Maoists.  Given these present trends, Maoist violence 
will likely increase in the future and the Maoist presence will 
be move closer to the India's urban centers in Eastern India. 
 
¶11. (U) This message was coordinated with AmEmbassy New Delhi 
and AmConsul Mumbai. 
JARDINE