Protesters holding up work at a factory building Tata Motors' Nano car agreed to talks over land seizures, a protest leader said on Tuesday, raising hope the world's cheapest car will roll out on time.
The talks offer is seen as a marginal softening in the stand of Trinamool Congress, the main opposition party in West Bengal state spearheading the protests, after it said parts of the factory had to relocate from land farmers did not wish to give up.
The protests slowed work at the factory for months, threatening to derail Tata Motors' plans to launch the $2,300 car in October to coincide with the Indian festive season.
Such has been the acrimony that Tata Motors Chairman Ratan Tata said he was prepared to move the plant from Singur despite having invested $350 million in the project.
The Trinamool has also come under pressure to find a way out of the stand-off after industry lobbies and analysts warned the protests could scare away investors.
"Doors are now open for talks. Things are getting eased," Partha Chattopadhayay, a top Trinamool Congress leader, told Reuters even as thousands of Nano workers stayed away from work for the fifth day on Tuesday in the face of protests.
The protests in Singur reflect a larger stand-off between industry in the country and farmers unwilling to part with land.
The trouble began after the government took over 1,000 acres (400 hectares) of farmland for the factory. The government offered compensation, but some farmers with smaller land holdings said it was inadequate and demanded their land be given back to them.
The disputed land measures about 400 acres.
"We agreed for talks only after assurances that the demand of returning 400 acres would be discussed," Chattopadhayay said.
The opposition wants West Bengal governor Gopalkrishna Gandhi to play peacemaker.
Work at the Tata factory in Singur, an hour's drive from West Bengal capital Kolkata, was suspended last week after threats from protesters.
The government, eager to resolve an issue threatening its industry-friendly image, said it was willing to discuss fresh compensation offers. Analysts agree that is the best way forward.
"The compensation paid for the land is measly," said Abhirup Sarkar, a Kolkata-based economist and social commentator.
"It should be three to four times higher than what was paid."
The controversy has seen other Indian states offering to host the Nano factory.
Shares in Tata Motors, India's top vehicle maker, have not been significantly affected by the dispute. They were down 1.5 per cent at 431 rupees at 0748 GMT, in a Mumbai market that was up 1.8 per cent.
(Editing by Krittivas Mukherjee)