PSA Peugeot Citroen has denied media reports that it is in talks with Indian carmaker Mahindra and Mahindra with a view to sharing technology and production facilities.

Unnamed sources said that the two were discussing a strategic alliance that would involve technology sourcing, mutual sharing of production capacity in France and India, as well as "significant investments".

M&M previously had a partnership with Renault to build and sell the Logan sedan in India, a deal which ended in 2010.

Peugeot said: "The Indian market is obviously important to us for the future, but at this stage we are not in discussion with anybody on a rapid return to India. Our current priority is the recovery of the group."

Mahindra declined to comment.

Peugeot has not been present in India since 1997 despite a number of attempts to return to the country.