By Rina Chandran

MUMBAI (Thomson Reuters Foundation) - The Indian state of Himachal Pradesh has withdrawn a court petition challenging the right of indigenous people to oppose a power plant on forest land, ending a seven-year tussle that highlighted the fight for land in the country.

Himachal Pradesh Power Corporation, a state enterprise, had appealed against an order by the National Green Tribunal (NGT) directing it to seek consent from four village councils for the hydroelectric project, in accordance with the Forest Rights Act. The case was due to be heard in the Supreme Court on Friday.

The petition had said that the order was not practical, as indigenous people were unskilled and incapable of taking informed decisions on technical matters.

India's Forest Rights Act of 2006 gives indigenous people and forest dwellers the right to manage and govern their traditional forests and resources. Any infrastructure or development project that requires forest land to be cleared needs the consent of the gram sabha, or village council.

"We have to move away from the idea of the gram sabha as illiterate people plotting to derail development," environment lawyer Ritwick Dutta, representing community organizations against Himachal Pradesh, told the Thomson Reuters Foundation.

"Around the world, free and prior informed consent of communities is being seen as necessary for businesses," he said.

The village councils in Kinnaur in the northern Indian state had said they were concerned about environmental damage from the power project. Activists said the area, known for growing apples, was fragile and that the plant could ruin livelihoods.

The state's petition was seen as an embarrassment for the opposition Congress party, which controls the state government.

The party, which had passed the Forest Rights Act when it was in power, has criticized the current federal government for its weak implementation of the law.

"The Congress party has always recognized the rights of gram sabhas ... for the protection of forest rights," a spokesman said, explaining why Himachal Pradesh had decided to drop the case on Thursday.

"Withdrawal of the petition by the state government is a testament to this commitment," he said.

Conflicts over land in India have increased as one of the world's fastest growing major economies expands, and land is sought for industrial use and development projects.

While several laws have been introduced in the past decade to protect the rights of farmers and indigenous people, some laws have been diluted in their implementation and not always helped the vulnerable, activists say.

(Reporting by Rina Chandran @rinachandran, Editing by Ros Russell. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit news.trust.org to see more stories.)