Production of Nano still suspended

Manufacture of the £1,000 Nano car in India remains suspended despite the ending of weeks of violent protest over compensation for land on which the factory is built.

Tata Motors has said that "limited clarity" over talks between angry farmers and the government means that production at the £200 million plant in Singur, eastern India, cannot yet go ahead.

Protests by farmers and political leaders who claim some locals were not fairly compensated for their land had grown increasingly violent, forcing India's largest carmaker to cease work at the factory and draw up alternative production plans.

The 15-day blockade was called off after the local government promised to compensate farmers with more land, but it is not immediately clear where that land will come from.

West Bengal's governor, who brokered the deal with opposition leader Mamata Banerjee, announced that a committee will be set up to decide within a week the details of the compensation package.

Banerjee is keen to give farmers land from within the project area, but Tata has said that it cannot keep costs down unless some 60 key suppliers, which have invested more than £55 million, are allowed to continue construction at the emerging auto hub.

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