5 Oct 2008

Thousands protest plan to abandon world's cheapest car

11:23 am on 5 October 2008

Thousands of people have demonstrated against Tata's decision to abandon plans to produce the world's cheapest car in the Indian state of West Bengal.

The car, the Nano, is expected to cost about $3,300, and was due to have been launched this month.

Tata scrapped the project because of sustained opposition from farmers who were demanding the return of land on which its factory had been built.

Local supporters of Tata's West Bengal project were bitterly disappointed with the decision and thousands of them took to the streets around the plant.

Some were armed with sticks and iron bars and they blocked roads and disrupted traffic.

Among them were labourers and contractors who had hoped that the Tata factory would provide them with sustained employment.

The head of the company, Ratan Tata, says having been faced with considerable aggression, there was no choice but to move out of Bengal.

"We have little choice but to move out of Bengal. We cannot run a factory with police around all the time," he said.

It had planned to make 250,000 cars a year at the Singur plant in West Bengal, rising to 350,000.

A number of other car firms also plan vehicles to compete with the Nano but have not yet begun production.

The dispute in West Bengal highlights a wider problem between India's growing industry - which needs land - and its farmers who are unwilling to give it up.

Mr Tata said the Nano will be built "within this year but I can't tell you where".

"We are going to do everything possible to come close to the deadline we had established," he said.

"We have got offers from several Indian states but we have not yet finalised where to produce the Nano... All these issues we will announce in the next few days when we have a clearer picture."

Mr Tata said his group still consider West Bengal as an investment destination in future.

"I value the considerable intellectual resources this state has, but something will have to change here," he said.

He was speaking after meeting the West Bengal chief minister Buddhadev Bhattacharya and his colleagues.

"This is a black day for Bengal. We will have so much more difficulty getting investments now," said the state's industry minister, Nirupam Sen.