Friday, July 10, 2009

Maoist insurgency hurting industrial development in India

Friday, 10 Jul 2009

Reuters reported that the growing Maoist insurgency in India over large swathes of the mineral rich countryside could soon hurt some industrial investment plans just as the country suffers an economic slowdown.

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 mulling investments.

The Lalgarh incident worried the country's third largest steel producer, JSW Steel, which is setting up a USD 7 billion, 10 million tonne steel plant near Lalgarh. Mr Biswadip Gupta CEO of the company's West Bengal operations "We are waiting and watching, so are the others. On top of the economic woes, you have the problem of Maoists now. It is very jittery."

Mr PK Mahapatra executive the alumina company's executive director of mines and refinery said "We are more vulnerable and we have to remain alert."

Senior railway official said a strike by Maoists in east and central India, against police action in Lalgarh, it has hit supplies of iron ore and coal. Mr Soumitra Majumdar spokesman for the South Eastern Railways said "Exports have also been hit and if supplies get cut off in this manner, at least three steel plants in the region will be greatly affected soon."

Mr Anjan Roy analyst at the Federation of Indian Chambers of Commerce and Industry, referring to growth of industry said "It is still a law and order problem, but it has not been taken seriously and can have serious consequences if not dealt with properly."

The rebels, estimated to have 22,000 fighters, operate in large parts of the eastern, central and southern countryside and officials said they are now spreading to cities and bigger towns. The Maoists, who are fighting for the rights of poor farmers and the disenfranchised, regularly attack railway lines and factories aiming to cripple economic activity.

(Sourced from Reuters)

1 comment:

Indian steel industry said...

The Indian steel industry entered into a new development stage from 2005–06, resulting in India becoming the 5th largest producer of steel globally. Producing about 53 million tonnes (MT) of steel a year, today India accounts for a little over 7 per cent of the world's total production.

India is the only country worldover to post a positive overall growth in crude steel production at 1.01 per cent for the January-March period of 2009. The recovery in steel production has been aided by the improved sales performance of steel companies.