EU state aid regulators opened on Wednesday an investigation into Slovakia's plan to grant 125 million euros ($139.7 million) to Tata Motors' luxury British arm Jaguar Land Rover, saying they had concerns about the legality of the measure.
The Slovakian aid is related to Jaguar Land Rover's 1.4- billion-euro investment in a car manufacturing facility in the region of Nitra, which aims to make 150,000 cars yearly.
The European Commission said it would investigate whether the project was triggered by other factors and whether the subsidy prompted the car maker to invest in Slovakia rather than in another EU country.
The EU competition enforcer will also scrutinise whether land transferred to Jaguar Land Rover for the project and a fee exemption for converting the land to industrial land complies with the bloc's rules.
Slovakia may have to modify or drop the measure if it is found to have breached the rules.
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