The car, which is being rolled out from the company's plant at Chakan, in Maharashtra, comes with 1.6 litre petrol or diesel engine options.
It will be available with manual and automatic transmission options.
"This is the first car which has been designed and manufactured in India," Volkswagen group board member (sales & marketing) Christian Klingler told reporters in New Delhi.
After launching its compact car, Polo, in February this year, the Vento is Volkswagen's second car targeting the mass market and will be positioned at the upper-end of the mid-sized sedan segment in the country.
Senior company officials said the price of the car will be announced in the first week of August and it will be available in the market in the October-December quarter.
The largest European car-maker had launched its much-anticipated hatchback, Polo, in the Indian market at a price ranging from Rs 4.34 to Rs 6.70 lakh (ex-showroom, Delhi).
The new Vento is the seventh model in India from Volkswagen's stable.
The company currently offers compact cars Beetle and Polo, premium sedans Phaeton, Passat and Jetta, and sports utility vehicle Touareg in the country.
Volkswagen has invested 580 million euros on its Chakan plant, which has an annual production capacity of 110,000 units.
The facility also manufactures the Fabia hatchback of group firm SkodaAuto.
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