Protests Lead Carmaker To Give Up Plant in India

NEW DELHI, Oct. 3 -- After months of violent demonstrations, Tata Motors, the Indian manufacturer of the world's cheapest car, will abandon its $350 million factory in West Bengal state.

The problem: protests by farmers who lost land in a deal that had been seen as a symbol of India's transition from agriculture to manufacturing and technology.

"Taking all things into account, mainly the well-being of our employees, the safety of our contractors and in fact our vendors also, we've taken the very regretful decision to move the Nano project out of West Bengal," Ratan Tata, chairman of Tata Group, said Friday.

From the start, farmers said the government had given them too little compensation and pressured them too hard to leave their land so Tata could build a 1,000-acre plant an hour's drive from Kolkata.

The state government recently offered farmers more-generous compensation and job guarantees in exchange for their land. But many continued to refuse the offer.

The factory has divided neighbors in the area's fertile potato- and cucumber-farming villages between those who were hopeful about the factory and those who mistrusted it.

Tata Motors has already been offered two other sites in neighboring states. The Nano, which is known in India as "the people's car," is a mini, golf-cartlike vehicle reminiscent of the Volkswagen Beetle. It was to roll out this month with a sticker price of $2,500.

As other Indian cities have boomed, Kolkata, formerly Calcutta, has remained in a bygone era. The area has sentimental ties to India's former Soviet ally. Hammer-and-sickle flags adorn Kolkata's coffeehouses and village tea shops.

Across India, land acquisition projects for about 92,000 acres -- estimated to be worth $54 billion -- are stalled by protests launched mainly by peasant farmers.

The plant at Singur was seen as an important test case for the world's biggest democracy. After Tata decided to abandon the project, pundits on television said the state's image with potential investors was now tainted.

Kolkata's famously left-wing intellectuals and celebrities were torn on the Tata issue, saying the case is symbolic of a society wrestling with its transformation.

Cricket star Sourav Ganguly recently tried to rally city youth in radio and magazine ads: "The Nano project will completely revolutionize the future of the youth. If this project goes elsewhere, the state will become a dark spot."