Volvo will invest $850m in India, where it has invested more than $700m, in a major expansion of its maritime production and service business, the company said.
The new factory in the southern Indian city of Chennai will create around 1,400 jobs, it said in a statement.
The new plant will also support the expansion of Volvo’s manufacturing business in India and in other emerging markets, it added.
The expansion is expected to create at least 1,800 jobs in Chennai, Volvo said.
Volvo has been investing heavily in the Indian market since 2016, as it sought to meet demand for its cars and trucks.
Its India unit is also expanding its operations, adding more than 300 jobs and investing in a new plant in Mumbai.