In 2001, the Telugu Desam government in Andhra Pradesh accepted a proposal to have peace negotiations with members of two banned organisations, Communist Party of India (Maoist) and People's War. Varavara Rao, Kalyana Rao and Gaddar were accepted by both sides as peace emissaries, to establish the conditions under which the peace agreement would be negotiated. Rao called for a partial lifting of the ban on these organisations in order to facilitate peace talks, and advocated a peaceful resolution of the ongoing conflict. Three meetings to negotiate a resolution to the conflict were held; however, Rao and the other emissaries resigned from their positions before the fourth scheduled meeting, citing the fact that the Naxal parties had pulled out of negotiations and that the State government had not, in their view, participated in good faith. Rao also noted that there were five police encounters during the negotiations, in which members of the banned parties were killed despite a temporary cease-fire. His efforts were subsequently lauded by the then-Home Minister for the State of Andhra Pradesh, K Jana Reddy who wrote to Prime Minister Narendra Modi in 2020 asking him to grant bail to an unwell, imprisoned Rao and, noting that, "As the then Home Minister I carried the responsibility of holding peace talks between the then AP government and Naxal parties in the year 2004 October. Mr Rao played a significant role in creating cordial climate in conducting these peace talks and was genuinely interested in bringing peace in the state.”
