The Business Standard newspaper quoted Nissan chief executive Carlos Ghosn as saying the group was looking for a new low-cost alliance in India in addition to one previously announced with scooter specialist Bajaj Auto.
"We are studying the possibility of tying up with Ashok Leyland and some other manufacturers in China and Indonesia for a small car project," Ghosn told Indian reporters on the sidelines of the Geneva auto show.
The Indian vehicle would aim for the middle of the small car segment, which is coveted by almost all global car manufacturers but currently dominated by Indian-Japanese collaboration Maruti Suzuki.
Any partnership would build on an existing tie-up between the companies signed in 2007 to build light trucks.
The Times of India said that Nissan and Ashok Leyland would aim to produce a car costing around 4,500 to 5,000-dollar.
In November last year, the Japanese group and its French partner Renault announced they would link up with Bajaj, a scooter and