Automobile manufacturers are wary of giving the government sensitive information on sourcing and cost of components imported from China.
The government has asked auto companies to provide details of spare parts sourced from China, and companies fear it might fall into the wrong hands, according to a Mint report.
Moneycontrol could not independently verify the report.
Amid border tensions and a push for self-reliance, the government is trying to reduce India's dependence on imports from China.
Invest India and the Society of Indian Automobile Manufacturers (SIAM) had not yet responded to requests for comment when contacted by Mint.
"The government has asked details of every product with procuring cost as well, and most automakers across will not be able to share it since it is at the heart of their operations. In consumer-related businesses, pricing and procurement strategy is key to profitability," a source told the publication.
If competitors get hold of such details, then it might hurt the profitability of the company, the source added.
If global automakers such as Hyundai, Renault, Nissan, and Mercedes provide such data to the Indian government, their global operations, research and development will be affected, a source told the publication.
"The government must understand that most vehicle makers won’t be able to give such data and this has nothing to do with improving local manufacturing. They already know the components that are being imported and can plan accordingly with stakeholders in the particular sector to increase local manufacturing," the source said.