Though there's no auto recall policy at present, companies on detection of manufacturing defects voluntarily announce recall.
"The recent spate of recalls led us to review the system and the government decided to come out with a policy that empowers it take action on erring companies if the situation so demands," said a senior government official.
In the aftermath of a recent recall by General Motors of its Tavera brand, the government had constituted an inter-ministerial group (IMG) to examine the need for a policy on the subject.
The panel suggested that the government should have the powers to order recall based on complaints by either consumer, dealers or NGOs regarding manufacturing defects.
"Once the policy is in place, it would empower the consumer or a dealer to conduct random checks on the models concerned and if found faulty, the automaker will have to recall the vehicle. It may also be penalised," the official said.
Developed markets such as Europe, Japan and the US have a policy on vehicle recalls and the government would take a leaf out of their system while formulating the policy. Officials said that the domestic auto industry is not very keen that such a policy be drawn by the government.
According to industry estimates, India in the last one year has witnessed recalls of over 3,00,000 vehicles.
"The pressure to implement a vehicle-recall policy has risen since General Motors India unit recalled 1,14,000 Chevrolet Tavera sport-utility vehicles over faulty reporting of engine-emissions test resulting in one of the country's largest auto recalls, both the minister of heavy industries and road transport and highways are taking the matter very seriously," the official said.
Besides, the government is also examining the testing procedures of the government-affiliated agenciesthe International Centre for Automotive Technology and the Automotive Research Association of India to see if rules were followed when testing the Tavera SUV.
Under the supervision of Nitin Gokarn, CEO of the National Automotive Testing and R&D Infrastructure Project (Natrip), a report is expected within a week that would be forwarded to the ministry of road transport and highways for potential imposition of any financial penalty on GM India in the Tavera recall case under the country's Motor Vehicles Act.