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Last Updated: Friday, 9 June 2006, 09:38 GMT 10:38 UK
Volkswagen gets go-ahead in India
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Volkswagen aims to make 13,500 cars in 2006 in India
German car-maker Volkswagen has been given the go-ahead to build a car plant in India's northern state of Punjab.

The firm, which is to invest about 15bn rupees (177m) in the plant, should be able to produce about 100,000 cars costing between 400,000 to 1m rupees.

The decision to open the Punjab plant follows a fraud case in India involving a former company executive.

The case had involved the state of Andhra Pradesh, where the plant was originally to be built.

The plant is expected to create 5,000 jobs directly, in addition to 50,000 jobs involving those who make components.

The size of India's car market is projected to almost double by 2010. This year, Volkswagen aims to sell 13,500 cars in India.

An agreement for the Punjab plant is expected to be signed soon, said chief minister Amarinder Singh.

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