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Indian automaker Mahindra and Mahindra Ltd said on Wednesday it would invest 100 billion rupees ($1.21 billion) to set up an electric vehicle manufacturing plant in Pune as part of its aggressive push in the country's EV space.

India's car market is tiny compared to its population, with electric models making up just 1% of the total annual car sales of about 3 million, but the government wants to grow this to 30% by 2030.

The Mumbai-headquartered conglomerate said it had gotten approval for the investment from the Maharashtra state government and would spread the investment over a 7-8 year period.

Pune is home to some of the country's top automakers, including Bajaj Auto Ltd, Hero MotoCorp Ltd and the Indian units of Volkswagen and Mercedes-Benz.

Mahindra, known for its sports utility vehicles (SUVs) and jeeps, said it will manufacture its upcoming Born Electric Vehicles (BEVs) range that includes the EV variant of the popular XUV 700 in the new plant.

The tech-to-tractors group is in talks with global investors to raise between $250 million and $500 million to accelerate its plans to build EVs, Reuters had reported in September.