India’s Vehicle Recall Policy Levies Up To Rs 1-Crore Penalty For Defects
Vehicles bound for shipment at a port. (Photographer: Toru Hanai/Bloomberg)

India’s Vehicle Recall Policy Levies Up To Rs 1-Crore Penalty For Defects

Come April, an automaker may have to shell out as much as Rs 1 crore as a penalty for producing defective vehicles.

A recall of more than 6 lakh two-wheelers, 1 lakh plus four-wheelers and over 3 lakh three-wheelers and quadricycles will attract a penalty of up to Rs 1 crore, according to the Central Motor Vehicles (Fifth Amendment) Rules, 2021 notified by the Ministry of Road Transport and Highways. For a recall of 1-6,000 two-wheelers, a manufacturer will have to pay up to Rs 10 lakh, the policy, effective April 1, said.

The recall will be limited to vehicles that are less than seven years old from the date of manufacturing or import, the notification said. So far, manufacturers would voluntarily recall vehicles that do not meet minimum safety standards, or found to have any defect, to replace parts or fix the problem.

Vehicle manufacturers and importers, the new rules said, will have to get each type of vehicle to be tested. All testing agency will establish compliance with the quality standard, automotive industry-standard within one year from the date of publication of such standards.

To begin with, a vehicle owner, a testing agency can make an appointment through a vehicle recall portal in case of any defect, and the manufacturer, importer or retrofitter will have to respond within 30 days, failing of which a designated officer will initiate an investigation and the cost or fees of any tests conducted will be borne by the manufacturer, importer or retrofitter, the notification said.

“The designated officer may suo moto issue a recall notice” in cases where the defect exists in a group of vehicles of the same design or manufacture, or items of equipment of the same type and manufacture and which originated at the design, manufacturing or assembly stage, and that it has already been supplied or made available to consumers, the notification said.

If an automaker does not agree with the government’s decision, then they can appeal in a high court within 90 days from the date of receipt of the recall notice.

Every manufacturer, importer or retrofitter will have to notify through their website or registered post or electronic mail regarding the initiation of a recall action to all registered owners of the affected vehicles, the notification said. The details should also include information of the defect for which recall has been initiated and its risk to the safety of occupants and road users, it said.

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