Japanese auto firm Suzuki has said it plans to open a new diesel engine factory and a second car assembly plant in India.
The Maruti 800 is India's best-selling car
The project, valued at about 10 billion yen ($91m; £50m), is aimed at boosting Suzuki's share of India's fast-growing car market.
Suzuki said the new engine factory would begin production in 2006, with annual capacity of 100,000 units.
The assembly plant will be run jointly with local partner Maruti Udyog.
Capable of producing a quarter of a million cars a year, it is set to begin production in 2007.
Maruti, set up to provide affordable cars for the Indian market, has been collaborating with Suzuki since its inception in the early 1980s.
It has become India's dominant car maker, capturing a large chunk of the market with popular small vehicles such as the Maruti 800 and the Maruti Zen.
India's car market is tipped for rapid growth in the years ahead as rising incomes enable more people to upgrade from motorcycles and scooters.
Although known mainly for its motorcycles, Suzuki has made rapid strides as a maker of small cars.
The company turned in a 28% jump in operating profits in its most recent financial year, and has forecast bumper sales for 2004 thanks to strong demand in Asia.