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India orders probe into Volkswagen cars

NEW DELHI (Reuters) - The government has ordered an investigation into Volkswagen AG VOWG_p.DE cars after the German automaker said it had used software in its diesel models to circumvent emissions tests in the United States.

The logo of German carmaker Volkswagen is seen at a dealership in Glenview, Illinois, September 24, 2015. REUTERS/Jim Young

U.S. regulators last Friday said the world’s top automaker by sales had installed “defeat device” software in models such as the Jetta, Beetle and Golf to lower emissions during testing. In normal conditions, the emissions exceeded permitted limits.

India’s government has instructed state-run testing agency Automotive Research Association of India (ARAI) to evaluate whether Volkswagen cars sold domestically similarly violated any pollution laws, which are less stringent than the U.S.

“We have written to the ARAI to find out whether Volkswagen is selling the same models in India that have been found violating U.S. rules,” Ambuj Sharma, additional secretary at the Ministry of Heavy Industry, told Reuters.

“ARAI has been asked to submit its report within a week.”

The government has not yet sought clarification from the automaker and will wait for the report before taking any further action, the official said.

“We want to know if what happened in the U.S. could happen in India or not,” said another senior official at the ministry.

Volkswagen could not be reached for comment on Friday, a national holiday in India.

Under Indian regulation, Euro IV auto pollution standards apply for vehicles sold in 50 cities, while Euro III standards apply in rest of the country.

Volkswagen made about 107,000 vehicles in India in the year through March of which it exported nearly two-thirds. It plans to raise capacity in the country to 200,000 vehicles by 2018.

If VW is found to have violated Indian standards, it may have to recall vehicles, pay a penalty or even face criminal proceedings, Sharma said.

Reporting by Manoj Kumar; Additional reporting by Suvashree Dey Choudhury and Tommy Wilkes; Editing by Stephen Coates and Christopher Cushing