Tata's Nano project finds a home

India's giant Tata Group has found a new home to build the world's cheapest car, cosseted by assurances that the project's past traumas with land disputes and political infighting are over.

By choosing to take its "Nano" car factory to the business-friendly state of Gujarat, after abandoning the original site in West Bengal, Tata has sent a message that a stable investment climate is a pre-requisite for participation in India's economic growth.

In an interview published Wednesday in the Economic Times, group chairman Ratan Tata attacked what he saw as the political manipulation behind protests by local farmers that forced the pull-out from West Bengal.

"Political opposition should be subordinated to the better welfare of the country," Tata said, suggesting that those who backed the protestors did not necessarily have their best interests at heart.

"Who is the loser? Are the people really going to prosper, many of whom live below subsistence levels?" he said. "What about the people who had aspirations for jobs? These are the questions that come to my mind."

The decision to move the plant -- which was 90 percent complete -- followed a month of violent demonstrations by activists and evicted farmers who complained they had been forced to give up their land for a pittance to make room for the Nano factory.

Some farmers said their signatures handing over their land were forged by workers from West Bengal's governing communist party.

The issue provided a rallying point for social activists and opposition parties hoping to break the Marxists' 31-year rule in the state.

The Nano has attracted worldwide attention due to its planned price tag of just 100,000 rupees (2,100 dollars) and, as soon as it became clear that Tata was considering relocating, a number of states rushed to compete for the project.

The agreement with Gujarat was formalised on Tuesday, and Ratan Tata said the choice was largely rooted in the state's ability to provide the necessary land immediately.

"Gujarat was able to define the land, secure possession of the land, the main thing, at an unbelievably fast rate," he said.

"In fact, if we could move the plant in a day, we could have actually started operating here, given the fact that everything was ready," he added.

Gujarat is one of India's most industrialised states and has a relatively sound infrastructure that has already attracted a number of multinationals.

The Nano plant will make 250,000 Nanos a year, rising to 500,000, the company says. However, it is not clear when production will begin.

The group had hoped to launch the car by December at the latest, but Tata officials admitted Tuesday that a more realistic timeframe lay between January and March next year.

The first batch of Nanos will be rolled out from existing Tata Motors plants elsewhere in India in what Ratan Tata described as a "makeshift kind of operation".

He also insisted that the 350 million dollars Tata had already pumped into the West Bengal plant was in no sense a write-off loss.

"All the equipment will be moved, so there is no loss there. We can also retrieve and utilise a fair amount of the fixed assets," he said.

The tussle over the Nano site was one of many recent land disputes in India.

The struggles have pitted the interests of farmers, who say they will starve without their land, against those of business and India's government, which say the country needs to industrialise rapidly.