It was seen as a symbol of the new emerging India - a factory that would not only generate thousands of jobs, but manufacture cheap pesticides for millions of farmers.
But the Union Carbide plant in the central city of Bhopal left a more potent legacy when it accidently released toxic gases into the air, killing thousands of people and causing many more to suffer in the world's most deadly industrial disaster.
A quarter of a century on, the derelict factory stands abandoned, but behind its locked iron gates lies what environmentalists say is "a disaster within a disaster" - a highly polluted site which, according to a new study, is slowly poisoning the drinking water for thousands of Indians.
"Our findings suggest that the entire site is highly contaminated," said Sunita Narain, director of the Delhi-based think-tank, the Centre for Science and Environment (CSE), which in October tested the toxicity levels of ground water and soil samples in and outside the plant.
"The factory site in Bhopal is leading to chronic toxicity, which is a continuous tiny exposure leading to poisoning of our bodies."
In the early hours of December 3, 1984, around 40 metric tonnes of toxic methyl isocyanate (MIC) gas leaked into the atmosphere and was carried by the wind to the surrounding slums.
The government says around 3,500 died as a result of the disaster. Activists however calculate that 25,000 people died in the immediate aftermath and the years that followed.
Activists and health workers say a further 100,000 people who were exposed to the gas continue to suffer today.
Sicknesses range from cancer, blindness, respiratory difficulties immune and neurological disorders, female reproductive disorders as well as birth defects among children born to affected women. But activists and lawyers representing the affected populations from the nearby slums say the tragedy of this disaster is that it continues unabated.
"After the disaster, Union Carbide did this botched site remediation and created a massive landfill," said Rajan Sharma, a New York-based lawyer, who is demanding that US company Dow Chemicals clean up the site and purify the water supply.
"There are thousands of tonnes of toxic chemical waste which have been not been properly disposed inside and just outside the factory site, which have been seeping into the ground for years."
Around 340 metric tonnes of chemical waste are stored in a warehouse inside the plant and needs to be disposed of.
Dow Chemicals, which now owns Union Carbide, denies any responsibility saying it bought the company a decade after Union Carbide had settled its liabilities to the Indian government in 1989 by paying $470 million for the victims.
"Any efforts by activists and non-governmental organisations to try to attach responsibility or liability for the site clean-up to Union Carbide and Dow are misdirected," Tomm F. Sprick, Director of Union Carbide Information Center, told Reuters.
"Regarding any site contamination ... we have no first-hand knowledge of what chemicals, if any, may remain at the site and what impact, if any, they may be having on area groundwater."
Sprick added that the Indian government took control of the site in 1998 and assumed all accountability, including clean-up activities, for the site.
No evidence of pollution?
Authorities also have for years refuted claims that the water is contaminated, saying that various studies commissioned by the government have found no evidence of pollution.
However, the CSE report contradicts the government's findings, saying samples taken from around the factory site were found to contain chlorinated benzene compounds and organochlorine pesticides 561 times the national standard.
Samples taken as far as 3km away from the plant were found to have toxic chemicals 38.6 times more than the standard. The report said there could be no other source of these toxins than Union Carbide.
Babulal Gaur, state minister responsible for relief and rehabilitation after the disaster denied this.
"There is no pollution and even if there was, it got drained away by the monsoons years ago," he told Reuters.
As dawn breaks over the slums of Jai Prakash Nagar, located directly opposite the plant, women brave the cool winter air to gather water at the communal taps with their buckets.
"You can smell it ... this water is poison and I hate giving it to my children to drink, but we are poor and have no choice," said 55-year-old Savitri, whose husband and son died a year after the disaster due to respiratory problems. - (Nita Bhalla/Reuters Health, December 2009)