Jaguar Land Rover (JLR) is investigating the potential of manufacturing cars in India, company sources said, as the British luxury carmaker looks to build on its growth in emerging markets with the help of Indian parent Tata Motors.

JLR, which has ridden a wave of surging demand in China and other emerging markets to post record profits over the past year, is "actively exploring the possibility" of building cars from scratch in India, said one company source.

"The idea is being looked into, with the (Jaguar) XF and (Land Rover) Freelander the obvious candidates," said another source.

The British brands, which already assemble two models in India using parts and engines shipped from factories in the UK, will also begin assembling its popular Range Rover Evoque in the country soon, the first source said.

Building cars in India would allow JLR to skirt high import taxes on luxury cars, which the country's finance minister proposed raising to 100 per cent from 75 per cent in his budget speech last week.

Bought by Tata for $2.3 billion from Ford in 2008, JLR has roared back into profit over the past three years as the main growth driver for its now-struggling parent.

Continued growth in markets such as India and China, which accounted for 22.3 per cent of its sales in the December quarter, is key for JLR as it embarks on an expensive overhaul of its production and product clout.-Reuters