In India, TMC established Toyota Kirloskar Motor Private Ltd. (TKM) as a joint venture with Kirloskar Group in 1997 and began local production. Automobile demand in India, which was undergoing rapid economic growth, exceeded 1 million vehicles for the first time in 2003, and jumped to more than 2 million vehicles in 2007, becoming one of the world's leading markets. Toyota progressively introduced vehicles series into the market, including the Qualis in 1999, the Corolla in 2002, and the IMV series Innova minivan in 2005. By 2007, Toyota sales surpassed 50,000 units.

Later, new models were introduced including the IMV series Fortuner SUV in 2009, and the sales and service network was developed further. As a result, the number of dealers in India grew from 22 in 2000 to 166 in 2011. Measures were also taken to increase sales outlets and train sales staff with the intention of introducing a newly developed compact car under the Entry Family Car (EFC) project focusing on family-targeted entry-level vehicles.