By Bappa Majumdar
NEW DELHI, March 31 (Reuters) - Indian police extended a curfew to several areas of the IT city of Hyderabad on Wednesday after four days of religious clashes between Hindus and Muslims left two dead and scores injured.
The religious strife has heightened tension and worried authorities in the southern city of Andhra Pradesh state, which houses major operations of such companies as Microsoft, Google and Mahindra Satyam.
Here are some questions and answers about the latest crisis and whether it can hurt business.
WHAT ARE THE CLASHES ABOUT IN HYDERABAD?
Clashes started after a Hindu group replaced Muslim flags with Hindu ones on streets during a festival, triggering clashes with Muslims. Nearly 125 people have been arrested so far.
The once princely dominion in Hyderabad has a history of religious tension with Hindu groups taking on Muslims over festivals and respective customs to gain supremacy.
Political leaders from both communities have also ignited communal clashes in the past, hoping to win support of voters from their respective communities, experts say.
A bomb blast in May 2007, and recent protests over the carving of a new state called Telangana in Andhra Pradesh, are examples of how violence has often hit the city.
WHAT IS BEHIND THE RELIGIOUS FLARE UP?
Old tensions may have played a part, especially at the beginning with spontaneous responses from both Hindu and Muslim groups, who came out of their homes with rods and sticks.
Local media also said police high-handedness was a provocation, while in other areas police were reported to have reacted slowly, and allowed rioting from both sides to grow.
The city police chief said the riots were premeditated without saying who was responsible.
Some politicians from Hyderabad city and coastal Rayalseema region, who do not want the formation of Telangana, may be behind the riots, pro-Telangana leaders say.
WHAT BUSINESSES HAVE BEEN HIT BY THE CLASH?
Operations in high tech companies in the IT hub of Cyberabad, about 20 km (12 miles) away from the main city of Hyderabad, remain unaffected with a large police presence keeping rioters at bay.
But a wholesale food grains market and a popular garment trade business has been hit inside Hyderabad, where a curfew has been imposed. Trade bodies say they are incurring losses worth more than $65 million a day.
WHAT COULD HAPPEN?
Regular violence in Hyderabad could make the city a less attractive destination for multinational firms and communal clashes might heighten tension, also worrying investors, experts say.
Instability could affect business soon and the present clashes could spiral out of control if political parties fail to come together on issues such as Telangana. (Editing by Alistair Scrutton and Jerry Norton)