Renault-Nissan and the government of Tamil Nadu are expected to sign a memorandum of understanding (MoU), under which the alliance will invest INR42bn (US$628m) in the Indian state, media sources said.

A state government official said: “We have begun releasing assimilated arrears. As of now, INR6bn of the outstanding INR19bn have been given back and more will come in subsequent months. Now that this issue is behind us, we are certainly doing our best to sign the second MoU.”

Nissan said, “We will not be commenting on the details of any talks. India is a major market for us and we are committed to growing our presence.”

A Nissan India spokesperson said. “Any announcement on further investment will be made in due course,” ET reported.