Jan 12, 2006 | 05:59 GMT

13 mins read

The Threat to India's High-Tech Sector

By Fred Burton A recent attack at a scientists' convention in Bangalore underscored the risks to core segments of the global economy in a place that is not widely recognized as a terrorist target: India. The threat does not come from al Qaeda necessarily, but there are at least two groups in the region who are ideologically motivated to strike at economic targets — and there is evidence that both recently have turned their gaze toward India's high-tech sector. Under any circumstances, India's "high-tech corridor" would make an attractive target for rebel or militant groups looking to make their mark in world affairs. India's combination of low-cost labor and a highly educated, English-speaking work force has made it a significant component in the business of many multinational corporations (MNCs) — especially in the software, e-commerce and customer-service industries. As many as half of the Fortune 500 are customers of Indian information-technology companies, and nearly as many of these firms reportedly have outsourced their customer service and support functions to India — numbers that are undoubtedly higher in the technology and e-commerce sector. Some of the largest U.S.-based companies — including Microsoft Corp., General Electric Co. and HP —- employ thousands of workers in India directly. And in addition to that, the country plays host to large numbers of expatriates and steady flows of Americans and Europeans traveling on business. In short, from a security standpoint, the options and opportunities are rich for anyone with a grudge against Western commercial interests or looking to attack the Indian economy or government itself. While all of these factors have been in place for some time, India has been regarded as a relatively safe and stable environment since the tech boom of the late 1990s — despite some violent internal conflicts. More recently, however, the threat level — specifically for multinational corporations — has ticked upward, as groups that previously focused attacks strictly against the government begin to shift their thinking and targeting ideologies. Currently, the two main threats to India's high-tech sector are posed by the Naxalites and the jihadists. The Naxalite Threat "Naxalite" is a general term describing numerous Maoist groups that are waging a low-intensity insurgency in several states. These groups emerged from a division in the Indian communist movement that corresponded with the Sino-Soviet split in the early 1960s. Since 1967, the Naxalites have been waging what they call a class struggle against the central government, with the aim of establishing a communist regime. Over the years, one Naxalite group — the People's War Group — has targeted Indian police, government officials, MNCs, landlords and other institutions, through bombings and assassinations, in the name of class struggle. New Delhi's response, in addition to traditional uses of federal police and paramilitary troops, has included forcibly displacing local tribes that sympathize with the Maoists and, allegedly, using vigilantes to attack the Naxalites and their supporters. It is believed that several states also use private armies and other organizations to roust out the Maoists: In Jharkhand state, for example, the government has sponsored hunts by villagers — backed by police — for Naxalites and their sympathizers. This long-running conflict shows no signs of easing. The Naxalites believe that the security sweeps are intended to drive out tribal elements that resist the entry of multinational corporations into India, and have pledged to lead a popular insurrection against the government to combat what they view as oppression of the peasant class. The insurrection, the Naxalites say, will include raids of government arsenals in order to arm tribes in the so-called "Red Corridor" running south from Nepal. The Maoists also have issued a direct threat to MNCs: In mid-December, the central committee of the People's Liberation Guerrilla Army told a "select group" of Indian journalists that their organization plans to attack multinationals and government institutions in several states. (The guerrilla group is the militant wing of the Communist Party of India (Maoist) — not to be confused with India's two mainstream communist parties, which both support the government currently in power.) As we noted at that time, the attacks were threatened in Jharkhand, Orissa, Chattisgarh, Madhya Pradesh, Andhra Pradesh and Maharashtra states. The Maoists specifically mentioned the Dandakaranya region of Orissa state, where the central government waged a campaign to forcibly displace Naxalite sympathizers among the local tribes.
So far, the closest thing to an attack on the high-tech sector that the Naxalites have carried out was an October 2003 strike against the convoy of N. Chandrababu Naidu — often referred to in the press as India's "High-Tech Czar," because he has been the driving force behind much of the sector's development in that country. Four Claymore-type anti-personnel mines exploded as Naidu, the chief minister of Andhra Pradesh, passed by on his way to a shrine. Eight more mines were discovered later at the ambush site — enough to have destroyed every vehicle in the convoy had they all detonated. Significantly, the Naxalites have carried through on threats issued against government targets — for example, the top police official in Manipur state was killed Dec. 31, 2005, in a vehicular ambush — and in our view the warning issued in December should be viewed seriously. Not only do the Maoists view the high-tech industry as a symptom of an oppressive capitalist system, but they recognize that foreign investment in India's technology sector is critical for the country's economic growth and thus represents a potential vulnerability for the government they want to destroy. Furthermore, attacking economic infrastructure targets is a central tenet of asymmetrical warfare. The Jihadist Threat The second threat emanates from — not surprisingly — the jihadists. Islamist militants — specifically the Kashmiri militant group known as Lashkar-e-Taiba (LeT) — have a history of carrying out attacks in cities like New Delhi and Mumbai, and Indian police and intelligence forces have arrested militants in Hyderabad and other southern cities. Therefore, it is not unreasonable to presume that jihadists are capable of carrying out attacks in the high-tech corridor. Capabilities mean little, however, without intent. The LeT — which is believed to have links to al Qaeda — has been blamed by the Indian government for an attack Dec. 28, 2005, at the Indian Institute of Science (IIS) in Bangalore. In that incident, a gunman armed with an AK-47 jumped from a car and shot into a crowd of academics (all in fields related to computing and operations research), killing one person and injuring three others. Someone else in the car lobbed a grenade, which failed to detonate. Authorities later announced an arrest in connection with the case. Whether or not allegations are on the money that LeT is responsible for this apparently amateur or opportunistic attack, the nexus to the high-tech sector is difficult to miss. Moreover, a few days after the IIS strike occurred, authorities arrested two men whom they suspect of planning attacks against the tech industry in Hyderabad and recovered a cache of explosives. During the past year, there have been other indications of risks that could be construed as touching on the tech industry: In March, Indian media reported a threat to Western interests in Bangalore based on evidence recovered during a raid on a LeT safe-house in New Delhi. And in October, the U.S. State Department issued a warden message warning U.S. citizens about potential terrorist attacks in India. The message, which specifically mentioned possible suicide car bombings, said the attacks could be directed against U.S. interests in New Delhi, Hyderabad, Mumbai and Kolkata. As in other parts of the world, the Islamist militants active in India are attempting to drive the central government out of areas they consider to be Muslim land, so that they can establish the rule of Shariah. At this point, traditional guerrilla activity is confined mainly to the northern province of Jammu and Kashmir, which has been disputed territory between India and Pakistan since they became independent from the British in 1947. After the Soviet Union's defeat in Afghanistan, Islamist militants backed by Pakistan have dramatically increased their activities in Indian-administered Kashmir. But they also have resorted to terrorist attacks against targets beyond that region — such as the 2001 bombing of the Indian Parliament in New Delhi. In the eyes of Islamist militant groups, hitting a U.S. or other Western multinational in India would damage India's high-technology sector — which depends heavily on foreign investment — by making other companies reluctant to invest in the country and possibly scaring away companies that are already there. And from an ideological standpoint, attacking a U.S. business would mark a continuation of what al Qaeda's leaders have called "the jihad against the Jews and Crusaders". Considering the Stakes The repercussions of any attack against India's high-tech sector would be felt far beyond India. Even a strike targeting an Indian multinational, such as Infosys Technologies, or an Indian company that outsources call center services to U.S. companies, such as Wipro Spectramind, would affect U.S. and European multinationals by extension. On a tactical note, we have noted previously that business targets in India must be considered very differently from diplomatic missions. The U.S. Embassy in New Delhi, for example, is an "Inman" building, meaning that its architecture includes security features (few windows, anti-vehicle barriers and large stand-off perimeters) designed to mitigate the effects of a terrorist attack. While some Foreign Service officers complain about working in such fortress-like conditions, these buildings are indeed very difficult to attack. On the other hand, there are hundreds or thousands of MNC offices in India with very little security. The buildings are not designed to withstand truck bombs, lack blast-resistant windows, and have very little stand-off distance from streets and driveways. Stand-off distance, of course, is the single most important factor in protecting a facility from a large vehicle-borne explosive. These buildings are vulnerable. Moreover, businesses usually do not have the option — as do diplomatic missions — of closing down in the face of a terrorist threat. This is as true for call centers and customer-service businesses that require around-the-clock staffing — and India is home to many of these — as it is for software-development companies that have a financial imperative to meet client deadlines. Business closures cost time and money, and in industries with razor-thin profit margins, these can have a disproportionate impact on a company's bottom line. When an attack in the high-tech sector occurs — and we use the word "when" deliberately — multinationals and local outsourcing companies will step up their security measures or move facilities elsewhere in reaction. Either move will impact the company's bottom line and will send economic ripples that will be felt far beyond India. Considerations for EP Teams The Dec. 28 strike at the IIS in Bangalore was eye-opening — not necessarily because of the damage or profile of the casualties, but because the institute is a high-profile location that regularly plays host to CEOs and other ranking businessmen from Western countries. As hubs of international commerce, Bangalore and Hyderabad can be compared to Tokyo and Paris as destinations for VIP business travelers. Technology titans and billionaires pass through with a frequency that is unheard-of elsewhere in the developing world. As potential targets in their own right, executives are vulnerable from many angles. In many if not most cases, these executives travel in India with the same level of protection they would receive in Tokyo or Zurich: a single, unarmed executive protection/corporate security officer. Executive protection (EP) officers are unarmed for both practical and other reasons. For one thing, obtaining the permits to carry weapons in foreign cities is next to impossible, and most corporations do not want to risk the embarrassment that would ensue if their security officer was caught carrying a weapon without proper authorization. As a practical matter, a single security officer with a handgun — no matter how well-trained — could do little to protect a CEO from several better-armed assailants or against a bomb. The "Die Hard" hero who can single-handedly defeat a team of terrorists with his pistol exists only in the movies — and even in "Die Hard," John McClane had four hours to do it. In reality, corporate EP officers can be multi-tasked to the extreme; frequently they spend most of their time worrying about logistics and transportation, with security for their CEOs an afterthought at best. Quite often, chauffeurs and cars provided by hotels are used for the traveling business team's transportation. While such vehicles are convenient and relatively inexpensive, and their drivers sometimes have good area knowledge, they are potential security nightmares. In fact, such drivers frequently are hired because of their skill in keeping cars free of dings, dents and breakdowns in what can be routinely chaotic traffic conditions. They would be very ill-prepared to protect their passengers in the event of a vehicular attack by a terrorist or would-be kidnapper or assassin. In all likelihood, they would freeze or be unwilling to ram a blocking vehicle (or otherwise damage their own vehicle) in order to "get off the x" and escape from an attack site. In addition, most hotel limousines are not armored vehicles and would afford little protection from small-arms fire or bomb blast and fragmentation. As a result of budget and manpower limitations, many corporate EP teams are not able to conduct thorough security work ahead of an executive's trip. Quite often, a corporate chairman or CEO will visit a number of cities or countries in the course of an overseas trip — forcing EP officers to leapfrog from city to city with very little preparation time for tasks such as conducting route analyses. Bomb sweeps of hotel rooms, cars or meeting rooms also are frequently not performed — whether because of cost considerations, concerns about appearances or failure to understand potential threats. But in India, that may have to change. The threats now emerging to the Indian technology sector from jihadists and Maoists will not diminish in the foreseeable future, nor will a massive or sustained campaign be necessary to cause considerable harm to the Indian or global economies.

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