When first launched, the Indica prompted many complaints from early purchasers, who claimed that the vehicle did not deliver horsepower and gas mileage as promised. In response to the customer complaints, Tata Motors greatly re-engineered the internals of the car and launched it as Indica V2 (version 2), which solved most of the complaints and emerged as one of the most sought after cars in the Indian automobile industry. Later, it was again updated, now marketed as the "Refreshingly New Indica V2". DiCOR (Direct Injection Common Rail) diesel version of Indica V2 was launched in January 2008. It features 16 valves, double overhead camshafts, a variable geometry turbocharger and an intercooler.

Indica Dicor features a water-cooled 1.4 L direct injection common rail (DICOR) diesel engine with exhaust gas recirculation and an oxidation catalyst with a turbocharger and an intercooler. Indica Dicor produces an output of 70 PS @ 4000 rpm and an increased torque of 140 Nm @ 1800-3000 rpm. Tata says that the indica with the Dicor engine will result in excellent pick up and a superior overall driving experience. The DICOR engine also ensures linear power delivery from the start and up to 15% better fuel efficiency.

It is roomy inside, comfortable for five and a perfect value for the money paid. Its cabin is also more refined now. The cabin is kept away from the turbo engine noise but still you cannot get away from the engine noise completely. The instrument gauge gets an electronic instrument cluster, with two trip meters equipped with light intensity controls. The rear seat backrest can be folded for more cargo space. Driving the V2 Turbo is a pleasure now, as the four-spoke power steering is more responsive.

Some of the standard exterior features include molded roof lining and door trims, tinted windshield, door and tailgate glass, variable intermittent type wiper, body-coloured wheel arch flairs and bumpers, and sill valence covers. The rear assets include seat backrest folding and re-folding facility with 60:40 split, all four doors-operated cabin lamps, power steering, remote release of fuel lid latch and tailgate latch. Refinement is evident but comparing it with the Korean and the Japanese cars' performance would be expecting too much of this small car. The Indica V2 DICOR comes with a price tag (ex-showroom, Delhi) of Rs.4.25 lakhs.