Maruti Suzuki India (MSIL) and Fiat India have extended their diesel powertrain sourcing deal for an additional three years, reported local media.

Business Standard, citing CarDekho, said MSIL had made the move considering the increasing demand for diesel cars. The company has used Fiat's 1.3 litre Multijet diesel powertrain since 2011 amd the sourcing deal was due to expire in 2015.

Meanwhile, Maruti is also developing its new diesel engine family, with its Celerio and the upcoming Y9T LCV to feature the company's first 800cc diesel engine. The company has established a diesel engine plant at Gurgaon that will manufacture an additional 150,000 units.