The manufacturing unit at Sanand in Gujarat would produce up to 700 cars a day, and will eventually have a workforce of 10,000 employees.
The first car from this plant rolled out in the presence of Tata Group's Chairman Ratan Tata and other dignitaries.
Meanwhile, speaking on this occasion Modi said he was proud to reckon Sanand as the manufacturing land of Nano.
"An ordinary person always dreams of owning a car. The land of Sanand is trying to fulfill the dream of middle and lower middle class families. Today we are contributing to the nation," said Modi.
On his part, Ratan Tata thanked Modi for providing a new home for manufacturing his company's dream car, the Nano.
"We searched for another home for the Nano and we wanted to be sure that we could move in peace and harmony and be able to establish a new home for the plant. Mr Modi stood out amongst all the others in guaranteeing us whatever we needed to have this plant in place," said Ratan Tata.
Nano's main manufacturing unit was shifted from Singur in West Bengal in 2008 after its failure to commence production due to the protest by Trinamool Congress head Mamata Banerjee.
Meanwhile, later, strong and stormy winds, caused by cyclone Phet, forced cancellation of a scheduled conference related to the launching.
The gusty winds partially damaged a portion of the just inaugurated manufacturing unit of Tata Motors, spread over 1,100 hectare of land.