8 Sep 2008

Farmers suspend protest over Nano car plant

4:22 pm on 8 September 2008

Farmers in eastern India who have blocked construction work at a Tata Motors car plant are suspending their protest after the government promised to return some land to them.

A dispute over land given to Tata Motors in the state of West Bengal forced the vehicle maker to suspend work late last week at the plant where it planned to build the Nano, billed as the world's cheapest car.

On Sunday, the governor of India's communist-ruled West Bengal state said a committee would work out the details of returning land in a week.

Trouble began after the government took over 1,000 acres of farmland for the factory last year.

The government offered compensation but some farmers rejected it, demanding that at least 400 acres of land be given back to them.

The Nano car was unveiled amid much fanfare in January, at a price of 100,000-rupee ($US2,250). The company still plans to launch it in October.

Tata Motors has invested $US350 million in the plant.