NEW DELHI, India — Tata Motors Ltd. is finding it difficult to contain costs on the inexpensive Nano small car, mostly because steel prices have risen about 50 percent in the past year.

In January, Tata created a splash when it unveiled the Nano, a basic car that it planned to sell with a wholesale price of about $2,500. The bare-bones four-door car has one windshield wiper and a two-cylinder engine and weighs just 1,278 pounds.

The company is asking suppliers to share the cost increases. Tata also has a pricing model in which it pays less for parts as volume increases, according to four suppliers.

"There are different rates for if they buy 10,000 units or if they buy 25,000," said the CEO of a Delhi supplier.

"That's never happened in India, where we usually set prices for the next six months or the next year."

A Tata Motors spokesman declined to comment.

It is not clear how much of the added costs will be absorbed by Tata Motors, but the four suppliers interviewed said the adjustments requested by the automaker were fair.

Tata is working to adjust parts prices with an informal consortium of about 50 suppliers. With steel at record highs — hot rolled coil jumped by as much as 30 percent in the past quarter to $742 per metric ton ($675 per U.S. ton) — the company agreed to raise its purchase prices for some parts, said a Delhi-based parts supplier, who declined to be identified.

Tata may receive some discounts on steel because its parent company, Tata Group, also owns Tata Steel Ltd., India's largest steel producer.

Suppliers to the Nano also have been squeezed by the nearly 40 percent increase in the cost of furnace oil, used to forge parts.