Kolkata, India - Farmers in eastern India who have blocked construction work at a Tata Motors car plant said they were suspending their protest after the government promised to return some land, officials said on Sunday.
A dispute over land given to Tata Motors in communist-run West Bengal state forced India's top vehicle maker to suspend work late last week at the plant where it planned to build the Nano, billed as the world's cheapest car.
On Sunday, the governor of India's communist-ruled West Bengal state said a committee would work out the modalities of returning land in a week's time.
"The government has taken the decision to respond to the demand of those farmers who have not received compensation," Gopalkrishna Gandhi, the governor said after meeting the chief minister and opposition leaders.
A Tata Motors spokesperson said they would not immediately comment on the outcome of the talks.
1 000 acres
Trouble began after the government took over 1 000 acres of farmland for the factory last year.
The government offered compensation but some farmers rejected it, demanding that at least 400 acres of land be given back to them.
The protests also reflected a larger standoff between industry in India and farmers unwilling to part with land in a country where two-thirds of a population of more than one billion people depend on agriculture.
Discouraged by the protests in West Bengal, which have been led by the local opposition Trinamool Congress party, Tata Motors said they were looking for alternative land, despite investing $350 million on the plant.
After days of talks, the government agreed to return some land within the project area and identify more in adjacent areas, governor Gandhi said.
Trinamool chief Mamata Banerjee said she was suspending her protests for seven days since the government has agreed to stop construction of ancillary units on land she said belonged to unwilling farmers.
"We will get land back within the project... this is our victory," said Banerjee.
October launch on track
Snub-nosed Nano, the 100,000-rupee ($2,250) car, was unveiled amid great fanfare in January but since then protests against land seizure for the plant have gathered steam.
The company still plans to launch the car next month, with existing plants to help compensate for any shortfall caused by the protests at the planned new factory.