Skoda Auto Volkswagen India on Monday said it is in discussions with a potential partner regarding possible collaboration in India, refuting speculation that it has halted the process of finding a local collaborator after the investigation over alleged customs duty fraud.

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The company, which is leading the German automotive group Volkswagen's India operations, asserted that finding a local partner in India and the show cause notice by authorities for alleged customs duty fraud to the tune of Rs 11,000 crore (about USD 1.4 billion) over import of cars as completely knocked down units, are completely separate and unrelated.

"To fully explore the country's growth potential, we are always considering new business opportunities and are evaluating various options to ensure the best possible solution to implement our strategy in the highly dynamic Indian market.

We are currently in discussions with a potential partner regarding possible collaboration," Skoda Auto Volkswagen India said in a statement.

The company was responding to a query on whether it has halted the process of finding a local partner in India after the alleged customs duty fraud investigation.

On the show cause notice, the company reiterated that being a part of a global group, it "is a responsible organisation, fully complying with all global and local laws and regulations.

We are analysing the notice and extending our full cooperation to the authorities". Earlier this year, Skoda Auto Chairman of the Board of Management Klaus Zellmer stated that the company is looking to collaborate with an Indian partner in order to grow its presence in the country.

Various media reports have linked the company to Indian groups such as Mahindra and JSW but these have not been officially confirmed.

In February this year, Volkswagen Group and Mahindra & Mahindra Ltd (M&M) announced their first supply agreement for electric vehicles components under their joint vision for electric-mobility collaboration.

Under the agreement, Mahindra became the first external partner to use Volkswagen's "unified cell concept", the core element of its battery strategy and it received components of Volkswagen's MEB for its purpose-built electric platform INGLO.

Last month, M&M expanded its electric vehicle portfolio with the introduction of two all-new models -- BE 6e and XEV 9e -- based on the INGLO platform, with entry level variants priced at Rs 18.9 lakh and Rs 21.9 lakh (ex-showroom), respectively.