Tata will inspect each of the 33,875 Nanos on the road after two of them caught fire. Tata officials, however, said the car is safe and has no design and manufacturing defects.
The company will begin inspection of the cars from Monday to "allay any concerns by owners" and where necessary, will add additional protection to ensure the car's safety. The inspection and any component addition will be free of cost, though the company refused to specify what additional protection may be required.
Since March, 20 engineers have been investigating the two instances of the world's cheapest car catching fire.
In March, Mumbai-based Satish Sawant's brand new Nano caught fire barely an hour and a half after he took delivery of the car from the dealership.
Post investigation, Tata said the car had "remanants of a foreign object on the hot exhaust system, which most probably led to combustion."
A fortnight later, another Nano fire in Gujarat was blamed on a ruptured fuel line.
"The investigation reveals the incidents in these two cars were isolated instances," Tata said in a statement.
"This further establishes the conclusion Nano's design is robust."