The world's cheapest motor car,
The 2012 Nano will be available in more colours and have more luxurious interiors, as part of an effort to rejuvenate its appeal.
The manufacturers also say the car will be more fuel-efficient.
Tata motors, which makes the Nano, also manufactures British luxury cars Jaguar and Land Rover.
The modifications were made after feedback from Nano owners, Tata Motors'
The engine will be increased by three horsepower to 38 and the company says the inside of the car will be quieter.
The car's makers say they hope the new model will help to increase sales. The price of the car will remain the same.
Last December it was reported that sales of the Nano had plunged by 85% compared with a year earlier.
Analysts pointed out that a series of fires in the Nano may have contributed. Tata offered free safety upgrades for the model.
It was launched in 2009, amid great fanfare as a car costing just 100,000 rupees ($1,979; £1,366). Tata owner Ratan Tata has described it as a "milestone" at the time.