(Adds details from Volkswagen statement, industry background)
By Aditi Shah
NEW DELHI, Dec 1 (Reuters) - Volkswagen's Indian unit will recall 323,700 diesel cars after a government investigation found it had flouted local pollution limits, the latest blow to a company that has admitted to cheating emission tests.
Volkswagen Group India will recall cars from Volkswagen, Skoda and Audi brands across various models equipped with the EA 189 engines, it said in a statement late on Tuesday.
In November, India found cars made by Volkswagen's local business had surpassed nitrogen oxide emissions limits, with significantly higher variations in some Volkswagen and Audi diesel cars.
The findings came two months after the carmaker admitted to cheating U.S. diesel emissions tests and said that up to about 11 million vehicles worldwide could be affected.
The emissions scandal is the biggest business crisis in the carmaker's 78-year history. It is facing slowing orders for new cars, its labour boss said, with consumers shunning purchases after news of the cheating broke in September.
To fix the issue in India, Volkswagen said it will update the software carried in EA 189 engines after getting an approval from the ministry of heavy industries and testing agency, the Automotive Research Association of India (ARAI).
Ambuj Sharma, additional secretary in the ministry of heavy industries, said the voluntary recall would begin this month.
In the wake of the scandal, India will, over the next six months, test diesel vehicles manufactured by all other carmakers to assess if the problem is industry-wide, Sharma said.
Volkswagen sold 26,479 vehicles between April and October giving it less than 2 percent share of the passenger vehicle market, industry data showed, lagging carmakers such as Toyota Motor Corp, Ford and Maruti Suzuki. (Reporting by Aditi Shah; editing by David Clarke)