"We plan to integrate our entire R&D efforts under one roof, instead of having them scattered at various locations," a senior company official said.
The official said the company was in the process of finalising the location for the proposed facility.
"We have zeroed upon Chennai and Pune as possible sites for the facility," he said, adding whole project would be independently funded by the company.
The company is trying to bargain certain incentives from the respective state governments, and a final decision would depend on what kind of concessions it finally gets.
The official said the need for an integrated facility was felt as the company was doing R&D at various locations on many products, including tractors, utility vehicles and its new international projects.
"The Mahindra research valley would have facilities like test track, crash facility, engine and polymer labs and engine research departments," he said.
By having all of these under one roof, the company plans to have greater synergy, which would make the whole process effective and fast.
The official said once started, the project would take about two years for completion, at the end of which they plan to have a total of 1,500 engineers working at the facility.