Conservationists working on the experimental project in Assam state said they have put up jute fences smeared with automobile grease and bhut jolokia - also known as the ghost chili and certified as the world's hottest chili by the Guinness Book of World Records - and were using smoke bombs made from the spicy pepper to keep elephants out.
"We fill straw nests with pungent dry chili and attach them to sticks before burning it. The fire ball emits a strong pungent smell that succeeds in driving away elephants," Nandita Hazarika of the Assam Haathi (Elephant) Project told The Associated Press on Monday.
The animals are not expected to ingest the potent chili - Hazarika said the smell would be enough to repel them and emphasized the measures would not harm the elephants.
Northeast India accounts for the world's largest concentration of wild Asiatic elephants; 5,000 are estimated living in Assam alone.
Conservationists say wild elephants increasingly attack human settlements that encroach on their natural habitat. Satellite imagery by India's National Remote Sensing Agency shows that up to 691,880 acres (280,000 hectares) of Assam's forests were cleared from 1996 to 2000.
More than 600 people have been killed by wild elephants in Assam in the past 16 years and villagers have reacted with an anger that has shocked conservationists. In 2001, in Sonitpur district, 180 kilometers (112 miles) north of the state capital of Gauhati, villagers poisoned 19 wild elephants to death after they feasted on crops and trampled houses.
"We have been forced to look for ingenious means to keep wild elephants from straying out of their habitats," M. C. Malakar, the state's chief wildlife warden told the AP.
At 1,000,000 Scoville units - the scientific measurement of a chili's spiciness - the bhut jolokia topped the Red Savina habanero, whose spiciness measured around 580,000 Scoville units.
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