A report in the new issue of India Today: ------------------------------------------------ Hitting Where it Hurts As the Maoist rebellion enters Kathmandu with a blockade, blasts and death threats, India's worries take a new turn By Indrani Bagchi When the Nepal Maoists forced the Soaltee Crowne Plaza in Kathmandu, Nepal's oldest luxury hotel, to shut down indefinitely on August 16, they were sending a direct message to King Gyanendra and his new Government headed by Sher Bahadur Deuba. The chairman of the Soaltee Group is Prabhakar Rana, business partner of King Gyanendra. By extension, Rana also runs Surya Nepal (earlier known as Surya Tobacco, and a joint venture with ITC in India). The Maoists clearly expect the Rana magic to work on the King so that the peace talks resume. On August 18, the first reports of panic buying came in from Kathmandu. The Maoist rebels who have threatened the Nepal monarchy for the past few years have been gradually closing in on Kathmandu. Presenting what is arguably the biggest security threat to Nepal and India, they have, along with the Indian PWG in Andhra Pradesh and the MCC in Bihar, banded together to wage war against the state. India has had to nuance its approach to the burgeoning problem in Nepal because of fears that the law and order issue could spill over into its territory. With all the 12 companies on the original Maoist list of those with "unfair trade practices" having shut down and a blockade of the Kathmandu valley under way, Nepal's security crisis is now lapping at the doorsteps of the royal palace. While there was silence from the palace, political parties continued to play games around each other. A recently established Industrial Security Group formed by India, US, UK, France and Germany to protect the interests of companies in Nepal protested against the Maoist threat, keeping it short of a political statement. India has 85 joint ventures in Nepal, most of them located in the industrial belt of Biratnagar. The latest series of attacks has added to India's worries about its neighbour, although the mea has played down the threat, saying blockades like this were "common". The policy dilemma that prevents Delhi from playing the aggressive big brother of the region adds to the frustrations. India continues to harp on the resumption of the peace process, but the "broad strokes policy" on Nepal is clearly not yielding the requisite dividends. Privately, Indian diplomatic sources maintain that their message rarely penetrates deep enough within the Nepalese establishment to make any difference. When Deuba arrives in Delhi on September 9, he can expect the diplomatic version of the riot act on this issue. Interestingly, the US has yielded to the Indian argument of Nepal being India's strategic backyard-a fact US officials reiterate, describing joint actions as "singing from the same sheet of music". Nepal watchers say the present crisis is a sequel to a similar threat issued by a Maoist-affiliated students' union in May, when they forced schools in the Kathmandu valley to shut down. Compared with the Al-Qaida, the Maoists are weak. But they are confronting an equally weak state. Indian alarm bells will go off depending on who blinks first. ------------