Recent protests at Tata Motors' project site in Singur have evoked stinging criticism from the western media with one newspaper saying that India's initiative to build the world's cheapest car has "driven into a quintessentially Indian ditch".
"The country's project to build the world's cheapest car has driven into a quintessentially Indian ditch," the New York Times said.
"It's a slap on the face of Brand India," it said quoting strategic branding firm Counselage's Managing Director Suhel Seth as saying. "Which foreign company will want to come in when India's most respected group cannot set up industry in a state?"
The Wall Street Journal said: "The escalating conflict is the starkest sign yet of how rapid industrialisation is clashing with skepticism towards modernisation and the reach of big business into rural India."
The company said yesterday that violent protests over the land had compelled it to stop building the plant for its much-awaited Nano model.
"Tata's predicament has been the most closely watched, because the 2,500 dollar Nano mini-car has been touted around the world as revolutionary, and Tata is known as one of India's most powerful, yet socially responsible, employers.
"As a result, Tata's problems could send a discouraging message to big international companies interested in operating in India," Wall Street Journal added.
The Wall Street Journal quoted analysts as saying that a withdrawal would be extremely costly and is likely to delay Nano's launch.
Jigar Shah, a Mumbai-based senior vice president of Kim Eng Securities, told WSJ: "This has happened to an Indian corporation, showing that it's not safe even in its own country. This is a very regrettable incident that is going to have a negative impact."
A total investment of Rs 1,500 crore has been envisaged for the project that is schedule to roll out Rs 1 lakh car Nano by October. It, however, has been mired into controversy right from its inception with Mamata Banerjee demanding return of 400 acres out of a total 1000 acres land leased out to Tatas by the state government.
As there were no signs of a breakthrough in the impasse, Tata Motors said on Wednesday that "it has been constrained to suspend the construction and commissioning work at the Nano plant in Singur in view of continued confrontation and agitation at the site."