Maoist rebels have in recent months stepped up attacks in response to a government security offensive to clear them out of their jungle bases.
Here are some questions and answers about the Maoists and their threat in India:
Who are the Maoists?
They want to overthrow the Indian state through armed struggle. Indian officials say the rebels have plans to oust the government by 2050.
They started their armed struggle in 1967 with a peasant revolt in Naxalbari village in West Bengal state but were initially crushed.
After regrouping in the 1980s, they began recruiting hundreds of poor villagers, arming them with bows and arrows and even rifles snatched from police and government armories.
The rebels now buy weapons from Chinese smugglers and are in touch with other militant groups operating in India, including groups in Kashmir and the northeast, says the government. They are equipped with automatic weapons, shoulder rocket launchers, mines and explosives.
Indian authorities say they are led by Koteshwar Rao, alias Kishanji, who is in charge of militant activities, and Ganapati, the political leader.
How big is the movement?
The rebels have an estimated 20,000 combatants, including 6,000-8,000 hardcore fighters.
Maoist rebels have made inroads in nearly a third of the country's 630 districts, according to the government.
They operate across a "red corridor" stretching from the southern state of Andhra Pradesh to the central state of Chhattisgarh and into West Bengal, bordering Nepal and Bhutan.
They remain hidden in dense forest bases and move around villages in remote areas.
How big a threat are they to India's stability?
Prime Minister Manmohan Singh has described the insurgency as the biggest internal security challenge since independence. More than 1,000 attacks were recorded in 2009 and 600 people were killed. The Maoists regularly attack railway lines and factories, aiming to cripple economic activity.
How big is the risk to investors?
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 territory and adds to risks for companies considering investments.
With the rebels controlling vast swaths of mineral-rich areas, the government has often struggled to transport coal to power and steel firms. The rebels extort about $300 million from companies in India every year to fund their movement, police and officials say.
What companies have been impacted?
The effect of the Maoist insurgency has already taken its toll on business. Work on a $7-billion steel plant by India's third largest steel producer, JSW Steel Ltd, has been delayed. Frequent rebel strikes have hit production and shipment at firms such as India's largest miner of iron ore, NMDC Ltd., and state-run National Aluminium Co. Ltd.
Rebels sided with farmers during violent protests against government moves to acquire farmland for industry, forcing the scrapping of a Tata Motors' Nano car plant and a $3-billion chemicals hub complex in eastern India.
Protests by farmers have also delayed work on two plants by the world's leading steelmakers Arcelor Mittal, and POSCO in eastern India.