In May this year, Volvo Cars had announced that it would start assembly operations in India in 2017.
"The rollout of first locally-assembled Volvo Car speaks volumes for the company's commitment to grow further in India," newly appointed Volvo Auto India Managing Director Charles Frump said in a statement.
He further said: "The last three years have been good for us in India and we noticed a positive and encouraging growth in terms of increased segment share, world-class product and new dealer appointments."
The company is on track to gain a bigger share of the luxury segment, Frump added.
Volvo Cars said India has shown a great long-term potential for a fast-expanding luxury segment and the decision to assemble vehicles locally has provided it a strong platform to achieve 10 per cent segment share by the end of the decade.
Volvo has a segment share of about 5 per cent and aims to double this by 2020.
The Indian luxury car market stood at 34,000 units in 2016, down over 5 per cent from about 36,000 units in 2015.
The company's assembly operations are located near Bengaluru, making use of Volvo Group India's existing infrastructure and production licenses.
Volvo Cars said apart from the XC90, more models on the company's SPA modular vehicle architecture are slated for local assembly in India and an announcement on the same will happen at a later stage.
Volvo Auto India sells a range of luxury models, including V40 luxury hatchback, S60 sedan and SUV XC90, in India.