
Hero Honda Motors will build the factory at a site near Haridwar in northern India.
The new plant will initially have a production capacity of 500,000 per year and will concentrate on 100cc models, which represent the biggest sales in that country.
The Indian market is currently selling about 7 million units per year, and is expected to rise to 12 million by 2010.
Honda Australia currently imports an Indian-built model -- the 100cc Lead scooter.