Markets were shut and private offices were closed as an indefinite shutdown of business establishments began in Nagaland on Saturday to protest against extortion by underground groups.

The shutdown was first observed in the state's commercial capital Dimapur on Friday, following which the other districts joined on a call given by the Confederation of Nagaland Chamber of Commerce & Industries (CNCCI).

The CNCI said harassment of the business community over extortion cannot be tolerated any further.

It urged the government to take immediate steps to stop the "unabated" extortions, intimidations and summons by the underground groups.

The CNCI said that banks, educational institutions, government offices and hospitals have been kept outside the purview of the shutdown.

State Home Commissioner Vikeyie Kenya said that it has "come to the notice" of the government that "rampant collection of taxes" from businesses, particularly in Dimapur, by various groups, most of which have signed ceasefire agreements with the government, has created an unbearable situation.

"Such activities reflect adversely on the law enforcing agency as well as on the state government," he said, directing the police to take stringent measures.

He instructed the district administrations and the police to report any violation of the ceasefire ground rules to the Ceasefire Monitoring Group for appropriate action.

Police should continue arresting "underground cadres" found extorting under the National Security Act (NSA), Kenya said.

The Dimapur police commissioner was asked to increase patrolling in market areas, and also deploy IRBn personnel to instill confidence among the people, he said.

The government also directed that a special cell be formed by the police commissioner to exclusively deal with incidents of extortion, he added.

The Dimapur Chamber of Commerce and Industries (DCCI) said directions of such nature were issued by the state government in the past as well.

"However, considering the government's continued insincerity, it does not seem to hold any water," it said.

The shutdown will continue as long as the government does not take any satisfactory steps, it added.