Peugeot will return to India with a INR40bn (US$890m) investment in a new factory at Sanand where Tata Motors builds the Nano, according to reports in the financial daily Mint.

Sanand is in the western state of Gujarat and the newspaper quotes three unnamed state officials and two Peugeot officials confirming the development of a 300-acre site there.

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Peugeot confirmed in February that it was planning to re-enter the Indian market and that it was evaluating a site at the time. The French company had a troubled joint venture with India’s Premier Automobiles in the 1990s which was officially ended in 2005.

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