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Nepal shutdown hits Indian business houses

Indian joint ventures in Nepal have been hit with their operations grinding to a halt due to a shutdown called by the Maoists.

india Updated: Feb 08, 2006 11:09 IST

Indian joint ventures in Nepal have been hard hit with their operations grinding to a halt due to a shutdown called by the Maoists ahead of the February 8 local polls.

Indian firms are caught between an adamant government and armed guerrillas.

"We suffered a Maoist blockade and a Maoist ban in 2004 when there was a different government," said an Indian businessman who did not want to be named.

"Then in February 2005, when King Gyanendra took direct control of the government in the name of combating the guerrillas, the rebels called yet another shutdown. Now, a year after the king's direct rule, when he says he has broken the backbone of terrorism, we are in the midst of yet anther shutdown. In reality, nothing has changed."

While the royalist government is trying to dismiss as a failure the weeklong closure called by the Maoists February 5 to disrupt the municipal elections, the Indian joint ventures have been forced to take it seriously.

On Friday, three senior employees of Surya Nepal, Indian firm ITC's blue-chip subsidiary in the kingdom, were abducted while returning home from the company's factory in Simra town in Bara district of southeast Nepal.

Since then, though the Maoists have released 26 of the 29 government employees they had taken prisoner during a raid last Tuesday in western Nepal, the Surya Nepal officials are yet to be released.

On Monday, the Industrial Security group comprising the embassies of India, France, Germany, the US and Britain along with their bilateral chambers of commerce condemned the abductions, saying industries and their workers should be allowed to work freely and peacefully.

Surya Nepal on Tuesday issued a public appeal to the Maoist union behind the abductions, the All Nepal Trade Union Federation (Revolutionary), asking for the immediate and unconditional release of the three officials.

"Surya Nepal is an apolitical business organisation, not involved in the ongoing political conflict," the tobacco giant said in the appeal.

"We remain committed to our belief in resolving issues pertaining to employee-employer relationship through mutual dialogue and discussion... Abduction of innocent employees who are only trying to earn a livelihood will not solve any problem."

While work at Surya Nepal's factory remained suspended due to the closure, another leading Indian subsidiary, Unilever Nepal, was reported to have sent its Indian employees back to India for the duration of the closure.

The multinational, in which India's Hindustan Lever holds 80 per cent stake, had been hit along with other business houses in February last year when the Maoists called a blockade to protest against Gyanendra's coup.

Maoist attacks forced yet another Indian subsidiary, Colgate-Palmolive, to cut down on its manufacturing in Nepal and relocate the factory to Himachal Pradesh in India.

Maoists have in the past also attacked Reliance Mills in Janakpur and forced the temporary closure of Goodricke tea estates in the eastern region. Dabur Nepal and Asian Paints were also said to be smarting under the closure.

Another Indian joint venture, United Telecom Ltd, has probably suffered most among the Indian JVs under Gyanendra's rule.

Last year, when the government snapped telephone links during and after the coup, UTL services were shut down. Since then, they have been suspended at least three more times in the name of security.

First Published: Feb 07, 2006 17:16 IST