Image: "Nano" car from the Tata Group
Reuters file
Carring a price tag of $2,500, the pint-sized Nano was slated to go on sale by the end of the year. If Tata pulls the Nano factory out of West Bengal, the much-anticipated car would likely be delayed.
updated 8/22/2008 10:05:45 AM ET 2008-08-22T14:05:45

The chairman of the Tata Group threatened Friday to move an important auto factory out of India's West Bengal state because of violent farmer protests and strong political opposition, a move that could delay the debut of the world's cheapest car.

The pint-sized Nano, priced at $2,500, was scheduled to go on sale by the end of the year, but if Tata pulls the Nano factory out of West Bengal, the much-anticipated car would likely be delayed.

Tata made international headlines when it announced the Nano's bargain-basement price and unveiled prototypes in January.

But the plant has sparked protests by displaced farmers who say they haven't received proper compensation and opposition politicians who accuse the company of taking advantage of the rural poor.

Company chairman Ratan Tata said he was prepared to leave West Bengal if the protests continue.

"If the state for any reason ... feels that we are exploiting them, if that is the feeling, we will exit," Tata told reporters Friday in Calcutta.

"We can't operate the plant with police protection," he said, adding that protesters have attacked Tata employees and stolen equipment from the factory site.

When will Tata decide?
Tata did not say when he would decide whether to leave the state, and he did not address how the move would affect production of the Nano.

West Bengal has been the center of a national debate about acquiring farmland for factories in India, where about two-thirds of the more than 1 billion people live off agriculture.

The controversy came to a head last year when police gunned down 14 protesters in Nandigram, a nearby district in West Bengal, causing an outcry that eventually scuttled a planned special economic zone designed to draw foreign investment.

Tata has the support of the communist government that has ruled West Bengal for three decades, but a coalition of opposition parties has strongly fought the project because it opposes using fertile farmland for industry.

Tata has also had to fend off angry farmers who claim not to have received proper compensation for the 997 acres Tata acquired in Singur, a village 20 miles northwest of Calcutta.

Mamta Banjeree, chief of the opposition Trinamool Congress party, which has led the fight against Tata, called Friday for the company to return 400 acres to the farmers.

The Federation of Indian Chambers of Commerce and Industry issued a statement urging politicians to work together to keep Tata in West Bengal. It called the Nano plant "a dream project for the state" that would create jobs and attract other companies looking to invest in manufacturing.

Tata Group, founded in 1868, is one of India's largest business conglomerates, with interests spanning steel, software services, hotels, chemicals and insurance.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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