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Page last updated at 20:46 GMT, Sunday, 24 August 2008 21:46 UK

Indian car factory under blockade

The Nano car factory in West Bengal
Protesters says farmers were forced off their land to build the factory

A factory in the Indian state of West Bengal, where the world's cheapest car is to be produced, is being blockaded by anti-government protesters.

The demonstrators say the state's Communist government seized 400 acres of local farmland to build the factory.

The government denies the accusation and has sent in thousands of police.

The Indian car manufacturer, Tata, which owns the factory, has threatened to move production elsewhere if peace is not restored.

'Unwilling farmers'

Tata, which is one of India's biggest firms, plans to build the Nano car at the factory.

The Nano is due to be launched later this year, priced at about $2,500 (�2,340).

Tata's owner, Ratan Tata, has previously said he will move production of the Nano out of West Bengal if unrest around the plant continues.

If the Tatas finally leave, it will be a disaster for West Bengal
Abhijit Sen
Bengal Chamber of Commerce

But his comments have not prevented the factory being blockaded by protesters led by the state's main opposition party, the Trinamool Congress.

The party's Chief, Mamata Banerjee, says the blockade will continue until the contested 400 acres are returned to the "unwilling farmers" she says were forced from their land.

She said the Tata factory could be built on other land not far from the current site.

"That will involve some relocation costs" Ms Banerjee said, "but has to be done for human considerations."

Attract investors

As the uncertainty over the factory in West Bengal continues, a number of other states in India have volunteered to host Tata's factory and build the Nano.

A BBC correspondent in Calcutta says that those offers will worry the West Bengal state government, which is trying to attract investors who have been put off for years by its communist policies.

"If the Tatas finally leave, it will be a disaster for West Bengal", says the Bengal Chamber of Commerce and Industry's Abhijit Sen.

"After years of industrial unrest and flight of capital, the state was beginning to attract investors as big as the Tatas", he says. "That could change if the Tatas exit."

Negotiations are continuing to try and resolve this impasse.


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