The government had earlier given a week's time to Automotive Research Association of India (ARAI) but the agency sought more time to complete its investigation.
"ARAI has commenced the testing of in-use vehicles of VW, Audi and Skoda which will take about four weeks... It will submit a final report by October end on this issue after taking all relevant findings into account," Additional Secretary Heavy Industries Ministry Ambuj Sharma told PTI.
Cars manufactured by Volkswagen group firms Audi and Skoda, besides the VW branded vehicles, are among over 11 million vehicles globally that were equipped with a software in diesel engines enabling them to cheat during emission tests in the US, Europe, South Korea and other markets.
In the US, the company faces fine of up to USD 18 billion. Models such as Jetta from Volkswagen and Audi A3, which are sold in India too, have been affected by the scandal.
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The world's biggest carmaker by sales has admitted that 11 million diesel cars worldwide were fitted with devices that can switch on pollution controls when they detect the car is undergoing testing.
Earlier, Sharma had said that if proved of any wrongdoing in India, Volkswagen may have to face criminal proceedings, fine and recall of vehicles.