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India's largest automobile manufacturer, Tata Motors Ltd.

, said Thursday that it plans to set up a plant in the communist-ruled West Bengal state to manufacture a family car that will cost little more than $2,000.

The plant will be set up with an investment of 10 billion rupees ($220 million), and is expected to start production in two years, said Ratan Tata, the company's chairman.

A prototype of the five-seater model to be manufactured at the West Bengal plant is undergoing tests at a Tata facility in the western Indian city of Pune, Tata said.

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