In 2006 Indian Prime Minister Singh declared Naxalism the single biggest internal security challenge ever faced by India. Estimated to be 40,000 strong, the Naxalites have been waging a Maoist-inspired insurgency against the Indian government since the late 1960s. The group has been a strain on the country's security forces and a barrier to development in the vast mineral rich region in eastern India known as the "Red Corridor." Today, the Naxalites heavily influence a third of the country, and India is no closer to eradicating the insurgency than it was 50 years ago.

The Naxalite impacted states are home to most of India's natural resources, where coal, iron, bauxite, manganese, nickel, and copper are found in abundance. Orissa and Jharkhand alone account for more than half of the country's coal reserves (coal is by far India's largest energy source). This makes the region strategically important for the country, yet Indian security forces have for decades been ineffectual as a fighting force in Naxalite territory. The depth of India's poverty, the vast expanse of rural land, and inadequate infrastructure in the Red Corridor have made it a difficult battleground, and the Naxalites have been able to attract new recruits on a regular basis.

Since many rebels are recruited among tribal villagers, they have a built-in advantage over the security forces. Whereas government forces outnumber the rebels and have greater resources at their disposal, they have frequently fallen prey to devastating attacks in remote areas. In May of this year 27 people, including high-level politicians, were killed when ambushed by more than 150 rebels in the state of Chhattisgarh -- a hotbed of Naxalite activity.



Electricity and running water are virtually non-existent in remote areas of the Red Corridor. The absence of basic necessities has produced opportunities for the Naxalites to provide services to local residents, such as irrigation systems. But the infrastructure that does exist has long been a target of the Naxalites: power plants, schools, and phone and rail lines have all been attacked. This gives credence to the central government's assertion that security needs to be established before development will come. This is a contentious issue among affected states, which argue that the Naxalites will have less ability to attract new recruits if basic needs are met on a more acceptable basis.



In 2006 a major piece of legislation was enacted in Parliament with the purpose of defining land rights for tribal communities, along with a process for economic project approval. But in 2010, the Council for Social Development, a well-established Indian think tank, released a report stating that the Act had been poorly applied in some areas, and not at all in others. Another complicated issue is that many tribal communities do not share the government's vision for capitalist led growth. Almost all their needs are met by indigenous resources available from the forests in which they live. It is therefore understandable that many villages would question whether they would ultimately benefit from enhanced investment, as the government wishes. This absence of a shared vision, and a lack of basic education excludes most locals from new jobs that may be created via new investment, make many of the selling points for local investment irrelevant to the local population. So an important part of gaining acceptance for economic development rests in convincing these communities that there are genuine benefits to be gained.

Under India's constitution, issues of law and order have traditionally been the responsibility of the states, rather than the federal government. The federal government's realization that it needed to play a greater role in the counter-insurgency led it to create a division of the Home Ministry devoted to the Naxalite problem in 2006. More than three years after identifying Naxalism as the biggest internal threat, Prime Minister Singh admitted in 2009 that the government's efforts at containing the Naxalites had not been successful. This was the backdrop for the government "Green Hunt," a large-scale offensive that combined central and state security and involved 50,000 troops deployed in the worst affected states. Despite setbacks, this initiative has been successful in targeting key leaders and gaining control of some territory previously held by the rebels.

The government is fighting as much for the hearts and minds of Indians in impacted states as it is for the objective of gaining control over its own territory. Given the number of civilians that have to date been killed by the Naxalites, and that a large part of Naxalite funding comes from extorting companies for protection money, the group's claim that it is fighting for the people lack credibility. The resulting loss of support for the Naxalites among some quarters is starting to have an impact.



If the government stays on the offensive, is successful in eliminating the majority of the Naxalite leadership, and can turn the development tide in the Red Corridor, it may be able to weaken the group enough so that it does not pose a serious threat. For the time being, the Naxalites remain a significant threat to the government of India. The Naxalites are likely to exist in some form for decades to come. The key to success is removing the sources of Naxalite support. If the standard of living can be raised to a sufficient degree, the Naxalite appeal will eventually disappear. However, given the Indian government's record to date on this subject, and its general perception of being ineffective, it will take much time, effort and money to turn the tide. The odds of that happening in the next 20 years are not encouraging.

*Daniel Wagner is CEO of Country Risk Solutions, a cross-border risk advisory firm, and author of the book "Managing Country Risk". Mikael Roussel is a research analyst with CRS based in New York.