Jaguar Land Rover is considering the possibility of manufacturing cars in India, according to Reuters, as the company looks to capitalise on its strength in emerging markets.

Citing an unnamed company source, Reuters reported that the firm, which is owned by India's Tata group, is "actively exploring the possibility" of manufacturing cars in the subcontinent. Increasing demand in emerging markets such as China has helped JLR to post record earnings in the previous year

"The idea is being looked into, with the (Jaguar) XF and (Land Rover) Freelander the obvious candidates," a source familiar with the matter told Reuters.

The two brands already have cars being assembled in India with parts shipped from the UK. Building the vehicles from the scratch in India would allow the company to bypass the hiked import duty on luxury cars proposed by the government in its latest budget.

"Jaguar Land Rover has ambitious plans to expand its manufacturing footprint and increase production in markets outside Britain," a company spokesman told Reuters.

"We continue to examine options to expand our range of locally assembled products," he said, referring to India.

The company is also planning to assemble its popular Range Rover Evoque in India soon, Reuters reported. JLR is currently behind its rivals BMW, Volkswagen's Audi and Daimler Mercedes-Benz in assembling cars in India.

Tata had bought JLR from Ford in 2008 for $2.3bn. Since the acquisition, JLR has managed to silence its critics with strong performance in the last three years, serving as the major growth engine for its now-struggling parent firm.

India and China accounted for 22.3 percent of JLR's sales in the quarter ending December. Expansion in these regions is crucial for the company as it considers costly changes to its production system. The company is investing $1.7bn with Chery Automobile Co, a Chinese plant.

According to the business consultancy Frost & Sullivan, India's luxury cars market is expected to grow six times by 2020 to 300,000 cars per year, reports Reuters.