The Japanese firm said it would invest a further 17.2bn yen ($220m; £135m) and hire new employees "to meet the rapid growth of India's automobile market".
Output capacity in India will rise from its current level of 160,000 vehicles a year to 310,000 in 2013, Toyota said.
Last month, Toyota said it would invest 4.9bn yen in India and boost output to 210,000 cars in the first half of 2012.
Toyota operates in India through a joint venture with Indian company Kirloskar Group.
Toyota Kirloskar employs about 5,400 people.
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