NEW DELHI (AP) - India's northern Punjab state has approved plans by the German carmaker, Volkswagen AG, to set up an automobile manufacturing plant, a government Web site said Saturday.
The decision came after a meeting between Punjab's top elected official and a delegation from Volkswagen during which Chief Minister Amarinder Singh gave the car major the go-ahead, the Web site said.
Volkswagen will invest around $330 million in setting up the plant which will directly create 5,000 jobs and have the potential to create an additional 50,000 jobs indirectly, said the Web site.
The plant, when completed, would annually produce around 100,000 vehicles, costing between $8,790 and $22,000.
The farming state of Punjab was among at least three others that were vying to attract the car major to set up its plant. The Punjab government has offered the company a slew of incentives, including free land, assured power and water supplies and capital subsidies in the initial stages of the project. The company has also been offered three alternate sites in the state to choose from as the location of the plant.
Details of the project were being finalized and a formal agreement would be signed soon before construction could begin, the site said.
With a rapidly growing middle class and rising income, the automobile industry estimates that India will add one million cars a year for the next three years, marking a 20% growth annually.