The villagers were released late Saturday night and have returned to their homes in Sukma district of Chhattisgarh state, said R.K. Vij.The rebels had rounded them up a day earlier and held them in nearby forests as a negotiating tactic to get the Chhattisgarh government to stop construction of a bridge. The rebels fear the bridge would give better mobility to security forces.
The incident embarrassed the state government as it occurred on the eve of Prime Minister Narendra Modi's visit to Chhattisgarh.
Police said it was unrelated to Modi's visit and the seizure of the villagers was meant to stop them from working at the bridge construction site.
The government has been trying to improve road connectivity in the dense jungles of Chhattisgarh because the poor roads hinder security forces from going after the rebels.
The rebels say they are inspired by Chinese revolutionary leader Mao Zedong and have been fighting for more than three decades.
The rebels, who have been called India's biggest internal security threat, operate in 20 of India's 28 states and have thousands of fighters, according to the Home Ministry.