Tata chairman Ratan Tata signed an agreement on Tuesday to move the troubled Nano cheap car project to the western Indian state of Gujarat. The move came after Tata Motors was forced to abandon its factory in communist-run West Bengal due to violent protests by evicted farmers and activists.
Gujarat Chief Minister Narendra Modi, a Hindu nationalist politician who has promoted his state as a business-friendly destination, wooed the project with an offer of 1,000 acres (440 hectares) and a promise of no labour strikes. "There was curiosity all over India and this is the occasion - Ratan Tata is with us in Gujarat," Modi told a press conference. "Tata and Gujarat can make a new chapter together with this partnership, which will give a fresh boost to the state's development."
With states around India vying to host the plant, Tata chose a site near Ahmedabad, the main city in Gujarat, company officials said. Ratan Tata welcomed the deal, which he described as "very attractive."
"This is an extremely momentous day and a very happy day for us," he said. "We have been through a rather sad experience. We now have a new home. "The Nano project was conceived as something that would provide affordable transport to a vast number of Indian families. I want the plant built in the shortest period of time.
"It will be our endeavour to be as close to the timelines we set earlier. We will have equipment from our previous location but there is a fair amount of work to be done." Tata announced late last week that it was pulling the Nano car project out of West Bengal, even though the plant it had been constructing near Kolkata was 90 percent complete.
The decision followed a month of violent demonstrations by evicted farmers and activists who complained they had been forced to give up their land for a pittance to make room for the high-profile factory. The Nano has attracted world-wide attention due to its planned price tag of around 2,100 dollars.
As soon as it became clear Tata was considering cutting its losses in West Bengal, intense competition broke out among other states like Karnataka and Andhra Pradesh to win the project. Gujarat is one of India's most industrialised states and has a relatively sound infrastructure that has already attracted a number of multinationals.