In India's West Bengal State, authorities have started talks with protesters opposing an automobile plant proposed by Tata Motors to manufacture the world's cheapest car.  The automaker has suspended work on the plant, in the face of growing protests by farmers and politicians.  As Anjana Pasricha reports from New Delhi, the difficulties encountered by the project reflect a growing problem in India:  how to move farmers off their land to make room for industrial expansion. 

When Tata Motors was looking for a site to establish an automobile plant to manufacture the Nano car, the West Bengal State government wooed the company and acquired one-thousand acres of land from farmers for the high-profile project.  

The Nano is the world's cheapest car, scheduled to rollout in October.

But the Nano plant in Singur became embroiled in controversy after some farmers, led by an opposition political party, demanded their land back.  The protests snowballed, last month, as demonstrators blocked roads and prevented workers from reaching the plant.

Calling the situation "hostile and intimidating" Tata Motors has suspended work at the plant.  
Authorities in West Bengal State, who want to rescue the project and the state's image as a business-friendly destination, have started talks with the protesters.

The head of the party leading the protests at Singur, Mamata Banerjee, says the concerns of the affected farmers must get top priority.  However, she is prepared for a compromise.    

"We want a settlement.  Let industry smile and [the] agriculture also," she said.

Many have blamed local politics for the deadlock in Singur.

But analysts say that, even if a solution to the impasse is found, the acrimony surrounding the Nano plant reflects a deeper problem, how to move farmers off their land to make room for industrial expansion.

Since India's economy entered a high growth path, many industries have drawn up ambitious expansion plans. State governments are wooing business houses to boost development in the state.

A senior official at the Federation of Indian Chambers of Commerce and Industry, Anjan Roy, says industry needs space to set up manufacturing plants.

"Industry cannot be set up in suspension, hanging somewhere.  So industry will need land and the country needs industry, so you will have to organize land for industry," said Roy.  "Now in India, 63 percent of land is arable.  But the fact is that with a very high proportion of arable land, there is still a lot of arable land which is not cultivated, which is lying fallow."

But as farmers and tribal communities resist giving up their land, the promised industrial development has become a flashpoint. The Nano plant is not the only site facing protests. In the eastern Orissa State, thousands of villagers have demonstrated against plans by South Korea's POSCO firm to set up a steel plant on large swathes of forest land.  The Supreme Court gave a go-ahead to the plant, but villagers say it will force them off their land.

In many other regions where industries want to set up factories, farmers have vowed not to give up heir land.

Sociologists say such conflicts are inevitable in a country where two-thirds of the people still depend on farming. 

The head of the Center for Science and Development in New Delhi, Sunita Narain, says tensions are growing because farmers are often displaced without adequate compensation and without help finding a new way to make a living.

"Indian laws are very antiquated, when it comes to land.  They do not go far enough in compensating rural communities for the land that they will give up, or the minerals that will be taken from their area, or water that will be taken away," said Narain.  "The larger message coming out of this is:  the poor in India are asserting the fact that they live on these resources and that they need either benefits to be shared or a different way of development."

Officials and businessmen argue that the factories will industrialize the countryside and provide much-needed jobs in rural areas, where millions of people are unemployed or underemployed.

Anjan Roy says businesses are willing to pay adequate compensation to landowners, but their investments must be protected.

"Industry wants a transparent system of land dealing for whenever industry has to have land requirements," added Roy. "Second, when a land is settled it should be unencumbered and there should not be any interference from politicians."

But development experts say the way ahead may not be easy and warn of more standoffs between business and farmers as the country's economic priorities shift from agriculture to industry.